Car insurance - question on policy payments post-accident

peteauch

Hi. So my son wrote his car off on Saturday morning and we're following up with the insurers. No other vehicle involved. The insurers (he's a named driver on his mum's policy) are saying that as the policy was monthly payments that we now need to pay the whole year's premium up front as part of the settlement (plus excess obviously). Doesn't seem quite right. Any insights anyone?

mr_stripey

I think it probably is right. You agree pay for a full year's insurance and the policy is priced accordingly ( I think)

You can cancel mid year and get pro rata refund, but cancelling here isn't an option since you are claiming?

That's my take anyhow.

DullGreyGuy

peteauch said:

Hi. So my son wrote his car off on Saturday morning and we're following up with the insurers. No other vehicle involved. The insurers (he's a named driver on his mum's policy) are saying that as the policy was monthly payments that we now need to pay the whole year's premium up front as part of the settlement (plus excess obviously). Doesn't seem quite right. Any insights anyone?

It's normal practice to deduct the remainder of the premium loan from the total loss settlement... people tend to become bad payers when they feel they are paying for nothing. 

Are the plans to get another car? You should be able to transfer the term of the policy to the new car however most insurers have a timelimit in which this must happen. 

Mark_d

The policy is an annual policy for which you pay monthly. If you hadn't claimed and instead chosen to cancel the policy, then you've already paid for the proportion of the year you've been covered for, so the policy could simply stop.

Now that you've made a claim you are required to pay for the whole year, even if you cancel the policy tomorrow.  I expect this information is contained within your policy documents although not necessarily explained in plain English.

Okell

Seems perfectly alright to me.

My understanding is that once a claim has been made the insured is obliged to pay that full years premium

Presumably they'll knock the outstanding balance off any payout.

Hoenir

Irrepective of whether the claim is made on day 1 or day 365 of the cover. The insurance company is still liable to pay out the same amount of money.  Paying monthly is simply an option. Cheaper to pay upfront annually in advance. 

peteauch

Thanks for all responses, figured that might be the case. I've always paid up front for the year for my own car so it was something I just wanted to clarify. 

LightFlare

peteauch said:

Hi. So my son wrote his car off on Saturday morning and we're following up with the insurers. No other vehicle involved. The insurers (he's a named driver on his mum's policy) are saying that as the policy was monthly payments that we now need to pay the whole year's premium up front as part of the settlement (plus excess obviously). Doesn't seem quite right. Any insights anyone?

Was he named as main driver ?

The way you have worded it sounds suspiciously like fronting