Insurer refusing car insurance after accident and pay out.

Ninja72

My daughter 22 passed her test last November 2024 and took out her first policy for a 2011 Ford Ka. At the beginning of January she had a small accident involving some ice on the road. She was travelling 20mph, slowing down to take a tuning onto a steep inclined driveway when she hit some ice and slid into a wall on the corner.  There wasn’t much damage to the structure or mechanics of the vehicle, a small dent on the wing.  But both airbags went off. My husband was just 5 mins away and they called her insurance who arranged for the car to be towed. Since then they wrote her car off, paid her the value of the car. 

Within 14 days (approx 8) she had another new Ford ka, slightly newer with less mileage but otherwise identical. She called Hastings to insure the new car and it was declined. Hastings won’t tell her why it’s declined. But are saying she now owes them £700 to cancel the policy or they will. 

She now has a new insurance policy and we don’t know what to do about the old policy. If they cancel it, will she need to declare it with her new policy. Will it follow her forever? How is it fair that she now has to pay £700 for old policy, plus the new policy when she hasn’t been given a reason for why it’s been refused. 

The accident wasn’t her fault. There was lots of icy roads around during this period. We’re out in the countryside so very few gritters out here. If it had been a bush instead of a wall the car would have had some nasty scratches, that’s all. It just seems very unfair that through no fault of her own, she’s being penalised massively. And frankly can’t afford all these charges. 

Will writing to the ombudsman help? 

Ayr_Rage

Firstly, the accident was your daughter's fault as there was no third party involvement.

How was she paying for the insurance, what was the annual premium and how long had it been running?

Is the £700 a pro-rata amount from the inception of the policy up until the date of the payout?

She cannot get away without paying something!

born_again

Ninja72 said:

My daughter 22 passed her test last November 2024 and took out her first policy for a 2011 Ford Ka. At the beginning of January she had a small accident involving some ice on the road. She was travelling 20mph, slowing down to take a tuning onto a steep inclined driveway when she hit some ice and slid into a wall on the corner.  There wasn’t much damage to the structure or mechanics of the vehicle, a small dent on the wing.  But both airbags went off. My husband was just 5 mins away and they called her insurance who arranged for the car to be towed. Since then they wrote her car off, paid her the value of the car. 

Within 14 days (approx 8) she had another new Ford ka, slightly newer with less mileage but otherwise identical. She called Hastings to insure the new car and it was declined. Hastings won’t tell her why it’s declined. But are saying she now owes them £700 to cancel the policy or they will. 

She now has a new insurance policy and we don’t know what to do about the old policy. If they cancel it, will she need to declare it with her new policy. Will it follow her forever? How is it fair that she now has to pay £700 for old policy, plus the new policy when she hasn’t been given a reason for why it’s been refused. 

The accident wasn’t her fault. There was lots of icy roads around during this period. We’re out in the countryside so very few gritters out here. If it had been a bush instead of a wall the car would have had some nasty scratches, that’s all. It just seems very unfair that through no fault of her own, she’s being penalised massively. And frankly can’t afford all these charges. 

Will writing to the ombudsman help? 

Was she paying monthly, which means it is a loan? So there are costs of the loan to payback.
She does not want a cancelled policy on her history. 1 at fault claim is bad enough. Which we hope she declared when taking out new policy?

Sadly it is a at fault accident, as no one else involved. So excess will be payable. 

You (or rather she) can't go to ombudsman till you have been through Hastings complaint process.

Mildly_Miffed

This won't count as a policy she has to declare as cancelled. They aren't refusing her business completely - they just don't want to take on that particular replacement car.

So her only choices are to get a car they will cover, or for her to terminate the policy early.

If she was paying the policy in installments, then - yes - she most certainly does need to pay the remainder of the premium, less any refund that might be due. But, since her policy has paid a total-loss at-fault claim, there will be no refund in any circumstances.

And, yes, it's at fault. It's only not at fault if the other party's insurer accept liability and repay your insurer in full. Since there is no other party...

If she lost control on the ice while trying to turn, she was going too fast for the grip available. Winter tyres may have given her enough grip at that speed. As you say, ice on ungritted rural roads in winter is not unexpected.

paul_c123

I don't think its down to the make/model. Its more likely, they don't want to cover a new driver (ie <6 months full licence) with a fault claim, as in its not in their risk profile. Its quite normal for an insurer to have a condition that the policy needs to be paid in full (ie for the whole year) if there is a claim made. Its a bit unfair them not offering insurance for the whole year though, and not allowing the vehicle change. I imagine in that situation, they ought to at least offer a pro-rata refund (so the £700 isn't due, if this was the balance on a monthly payment scheme).

Definitely one to do some further investigation on of what's going on, and a complaint if needs be.

Aretnap

paul_c123 said:

Its a bit unfair them not offering insurance for the whole year though, and not allowing the vehicle change. I imagine in that situation, they ought to at least offer a pro-rata refund (so the £700 isn't due, if this was the balance on a monthly payment scheme).

No refund is due if a claim has been made on the policy. The industry should allow the option of transferring the remaining months of the policy to the new car, but that is dependant on their underwriting criteria - they would have to be normally willing to insure the customer to drive that car.

I am surprised that they are asking for money to cancel however. Where there are outstanding payments on the policy, in a write-off situation it would be more normal to deduct the outstanding payments from the settlement figure rather than rushing the customer not paying then afterwards. Worth asking for clarification on exactly what the figure of £700 is supposed to cover.

Herzlos

It's a silly system, but "at fault" basically means the insurer paid out. "not at fault" just means they reclaimed the money from elsewhere. So your daughter was at fault.

She's presumably paying her insurance monthly, but that just means she's taken out an annual policy and is paying it off monthly. So she'd have to pay the rest of the balance if the insurance was wrapped up due to the payout.

I'm not sure why they won't cover the new one unless they are factoring in the claim and the fact she's only had a license for 2 months.

So whilst she can try and take them to an ombudsman for not covering her on the new car, she's probably a lot better off paying the money to cancel the old policy and then seek a new policy. She can always reclaim the money if she wins the appeal, though to set expectations it's unlikely.

Baldytyke88

Ninja72 said:

 

She now has a new insurance policy and we don’t know what to do about the old policy. If they cancel it, will she need to declare it with her new policy. Will it follow her forever? How is it fair that she now has to pay £700 for old policy, plus the new policy when she hasn’t been given a reason for why it’s been refused. 

The accident wasn’t her fault. There was lots of icy roads around during this period. We’re out in the countryside so very few gritters out here. If it had been a bush instead of a wall the car would have had some nasty scratches, that’s all. It just seems very unfair that through no fault of her own, she’s being penalised massively. And frankly can’t afford all these charges. 

Will writing to the ombudsman help? 

Has she declared another open insurance policy with an ongoing claim?

She had an accident that wrote off her car, so not really a small accident. I am not surprised that they don't want to insure her.

If she truthfully answers the questions when filling out the insurance, it will be very expensive.

jimjames

Ninja72 said:

But are saying she now owes them £700 to cancel the policy or they will. 

She now has a new insurance policy and we don’t know what to do about the old policy. If they cancel it, will she need to declare it with her new policy. Will it follow her forever? How is it fair that she now has to pay £700 for old policy, plus the new policy when she hasn’t been given a reason for why it’s been refused. 

She definitely needs to get that sorted asap. Having a cancelled policy on her record will affect insurance costs for the rest of her driving life (unlike accidents or convictions it's a forever question so no time limit) 

I suspect what has happened is that she has taken out the original policy and decided to pay monthly. That isn't a pay as you go option where you pay for the months you are using it, you still owe the full cost for the year but they loan you the money to pay it off monthly. If you have an accident and the policy is closed you still need to pay the remainder of the loan off. If that is the case then no need for the ombudsman, she just needs to pay off the remainder of the original policy that she took out. 

born_again

jimjames said:

She definitely needs to get that sorted asap. Having a cancelled policy on her record will affect insurance costs for the rest of her driving life (unlike accidents or convictions it's a forever question so no time limit) 

I suspect what has happened is that she has taken out the original policy and decided to pay monthly. That isn't a pay as you go option where you pay for the months you are using it, you still owe the full cost for the year but they loan you the money to pay it off monthly. If you have an accident and the policy is closed you still need to pay the remainder of the loan off. If that is the case then no need for the ombudsman, she just needs to pay off the remainder of the original policy that she took out. 

Insurance life... No matter what type off insurance 😶‍🌫️

Aretnap

Herzlos said:

It's a silly system, but "at fault" basically means the insurer paid out. "not at fault" just means they reclaimed the money from elsewhere. So your daughter was at fault.

Not sure that it's a silly system. If nothing else whether or not the insurer was able to recover it's costs from a third party is something that's completely objective and verifiable.

Whereas two people can have very different opinions on who was to blame for an accident. If you skid in icy conditions is that an unavoidable act of God, or a sign that you should have been driving more carefully in the conditions? And if it's taken as the former, what's to stop everybody who takes a corner too fast and hits a wall claiming that they skidded on ice (or perhaps oil, if it was the middle of summer) and getting their claim recorded as non-fault? 

Agree that the term fault is potentially misleading and but would be better if insurers used different jargon. But it's important that this is declared as a fault claim to insurers now, as that's how it will be recorded on the databases.