Car insurance - don't rely on a continuous payment authority

richardH

I was stopped last week by the police for having no car insurance.    Since 5th August this year.    Thank god they did stop me - because they were right, and in those 3 months I could have been in a very serious accident, with the possible outcome of being sued for hundreds of thousands of pounds of compensation due to an injury I (or someone driving my car) had caused.   Or being injured myself with no cover.     Normally, this situation results in the car being towed, a £200 fine and 6 points on your licence.    This time, the police hung around while I rang my wife, who then checked the paperwork, and rang our insurers (London Victoria).   They confirmed that renewal had been processed - on 4th August - then "we had cancelled it on 5th August".   So the police were right - there was no insurance (at all) on the car.

The way this arose needs to become well known, because it could happen to anyone, even the "well organised", as I thought I was.   The insurance was indeed renewed on 4th August, and a new certificate (showing cover till August 2021) was sent to us by email that day, which we saw and then forgot about it (as you do with tasks that are "completed").    

What we didn't spot was a second email on 5th August from LV saying that they had failed to take payment on our credit card, and thus the insurance put in place the previous day was now null and void.    Later investigation showed that the credit card (Coop Visa) had been changed due to some fraudulent payment, and thus there was a new number on the card - same account though.   The "Continuous payment authority" on the card thus failed.

Who was to blame here?   As far as I can see everyone was to blame - because every party failed to take "reasonable and common sense action":
1.   The insurers LV simply sent one email on 5th August advising of no insurance.   Nothing more.  No phone calls - zilch.   And yet they were perfectly able to see the car was uninsured (on the national database, just as the police could) - we hadn't just decided to take our business elsewhere.
2.   The Coop Visa failed to update the CPA.    
3.    We failed to look at our emails.    In mitigation I would say that week in early August was the one with the heat wave, and I was with my 87 year old mother who was suffering from heat stress, and I was running around medics and hospitals - not doing careful checks of emails!

The actions I have now taken is to cancel the Coop Visa card altogether, because we have no idea how many CPAs are on it, or who holds them.  As far as I know there is no place I can look up CPAs, and companies are very good at sneaking them in when not asked for (in the small print).   I won't ever be using CPAs again.
We have also had to renew car insurance with LV this year - but we have refused to deal with them by email.  In future everything will be on paper in the post - because we cannot trust them to look after our interests.    Doesn't say much for an "insurance company" does it?    Its very unlikely we will continue with them beyond 2021 - though I suspect their behaviour will be typical of the insurance industry unfortunately.

An interesting further question arises here, because I had the certificate sent on 4th August with no hint in that there was any kind of "problem".   I didn't have a copy in the car on the day the police stopped me, but I could have done - and my wife reported turning it up, so I was saying to the police "Your information must be wrong".  It was only when a call was made to LV did the actual situation emerge.   Fortunately, there was no need to invoke the insurance between August and November - but if there had been a need, would LV have a legal right to refuse to honour "the certificate" on the basis of sole email advising of its cancellation?

As things stand now, the police advised I am still likely to be prosecuted.  I could get a £200 fine and 6 points on my licence.   Since I already have 6 points from previous years, I could end up with 12 points, and potential loss of my licence - which will still be fairly catastrophic for me.   I will of course take this to court, and cite the above as showing the insurance plus CPA system is flawed.   Interestingly, the police themselves admitted as much when they stopped me!

Richard

Browntoa

Afraid it's your mistake , you acknowledge that you were indeed sent an email.

I cannot see any way your court case will end in your favour

[Deleted User]

Certainly no blame can be attached to LV. The issue is your fault, but also unfortunate that the CPA didn't carry over. However, you can’t rely on that as a means of avoiding responsibility for your own affairs.

You also need to pay better attention to your banking arrangement, as you should have been aware of the reissue of the card.

Save your court money for buying future car insurance, as that is likely to now be more expensive. No point in knowingly throwing money down the drain.

 

davidmcn

richardH said:

the credit card (Coop Visa) had been changed due to some fraudulent payment, and thus there was a new number on the card 

And was this news to you?

clive0510

I Never forget my car insurance renewal, because it falls on feb 14th, so there no way I can forget that!

Sandtree

I cannot say I recall LVs letters in particular but with most renewal offers they will print the last 4 digits of the card they will charge if you do nothing and its at this point you are supposed to double check that the digits matchup with the card in your wallet.

LV has sold its book of business to Allianz which went through earlier this year and so changes may well be afoot in their processes, letters etc as inevitably Allianz will want to achieve efficiencies of scale and not two different sets of systems, processes etc even if they maintain the two distinct brands.

The rules around certificates of insurance were changed to facilitate the issuance of digital certificates... the original requirement that certificates are to be returned in the event of a policyholder cancellation is rather moot when you are talking PDF files. Had the police checked MID and it said you were uninsured but you then produced an apparently valid certificate of insurance then they most likely would have checked with LV who’d have informed them of the non-payment cancellation.

Obviously having to now declare a cancellation for non-payment on all future insurance requests is the other issue.

Rhubarb_Shed

I feel there are two areas that the industry needs to get a handle on here:

1 - CPAs.    There is another post in the Insurance section today where that OP is complaining that an expired card had been updated and an unwanted renewal premium taken.  I also read a post a few days ago where a fraudulent CPA had continued to be taken because card details had been happily updated after a card had been replaced.  At best the use of Visa updater (or other equivalents) seems to be a hit and miss affair; how/when the system is used needs to be made clear, both by banks and by those merchants who set them up.

2 - Communication of major changes.     Cancelling an insurance policy can have an effect out of all proportion to the premium paid.  Imagine the potential costs that the OP could have faced had they been involved in a serious accident.  Where cancellation is being considered,  I'd think a warning email should be sent first, with the opportunity for the matter to be addressed by the customer,  then, if appropriate, a letter to formally confirm cancelation.  


If the police proceed with prosecution, then you will get a court date as it sounds like you stand to be disqualified.  If you plead/are found guilty then you are potentially looking at 6-8 points, an income based fine, prosecution costs and a surcharge.  In total these may well be in excess of £200.
IMO you are guilty of the offence, and the court may have sympathy for what has happened but the two flies in the ointment would seem to be that you did not update your card details after the card number changed, and they did send you an email informing you of the cancellation.  It may be just worth speaking to the prosecutor before the session starts, on the off chance that they might 'take a view', though this is very much a long shot.
A points based 6 month disqualification must be a very real possibility, so if this would bring you exceptional hardship, and you are not being represented by a solicitor, have your reasons ready...do your research on this.  Those on the Motoring board may well be able to give you more advice.

dunstonh

3 months uninsured.    Were you hoping you got away with non-payment?  After all, most people would notice very quickly that their car insurance hasn't been taken.

Ditzy_Mitzy

Ultimately it's the driver's responsibility to ensure adequate cover is in place for the journey being undertaken.  The insurance company is now off the scene, effectively, because the policy you were relying on does not exist.  There's no contract and you've never paid LV a penny for that policy.  You acknowledge that an email was sent confirming the policy had failed to be established.  You also, presumably, have been sent credit card statements in the intervening months.  At the very least you would have had access to statements for the card, thus could have checked to see if monies were being paid to LV.  Monies were not being paid, which should have rung alarm bells.  
Expecting an insurance company that doesn't insure your motor to start checking the Motor Insurance Database to see if you've been diligent enough to set up alternative insurance is simply not reasonable.  Notwithstanding that it's not likely to be possible for reasons of data protection: LV was not your insurer at that point.  
Moving on to the bank: presumably a replacement credit card was issued at the point the card number changed.  Did anything come with the card to suggest that continuous payment authorities would no longer work?  But even so the point regarding the statement remains: you could have checked to see whether the payments were being made.  In fact, with the fraud on the account, it would have been wise to check more often than usual to verify no more nefarious activity was going on.  Sorry.  

csgohan4

'We failed to look at our emails.    In mitigation I would say that week in early August was the one with the heat wave, and I was with my 87 year old mother who was suffering from heat stress, and I was running around medics and hospitals - not doing careful checks of emails!'


This is pretty clear cut, it's your fault and no one elses. A paper certificate of insurance means nothing, I got mine even though it wasn't due to be in action 3 weeks later, I could have cancelled the payment and still have a certificate albeit not valid

Personal circumstances are not the insurers problem, they are not a charity, they cannot check everyone if they are insured elsewhere, they have no duty of care to those they do not have an active insurance product. 

Your complaint will unlikely  be upheld
This will be an expensive lesson for you, diarize your insurance, check the money goes through. It is your responsibility and no one else's. 

Just like people who default their mortgage because they don't have enough money in that bank account, do they complain the lender should have checked there was enough money and used another account instead?

Blackbeard_of_Perranporth

Time that OP got a money management programme to store all their payments on. I use MS Money.

As for LV, my MS Money shows me which account the insurance comes out of, and when mine was renewed on 1st August, my bank had a hold for their cash the day before. Simple.