misled on insurance?

msm55

Hi all,

Apologies for the lengthy post. I’m hoping someone here has experience or advice on the situation I’m dealing with. I’ve entered into an unregulated hire purchase agreement for a hire vehicle with a company , who clearly stated, both verbally and in writing that the vehicle came with comprehensive insurance.

After a recent non fault accident, I asked them to confirm the level of cover. Initially, they were reluctant to provide a clear answer, simply pointing to the insurance certificate (which did not state the level of cover). Eventually, they confirmed I have 'full comprehensive policy - which covers where I may be at fault'. Then, a day later, they contradicted themselves by admitting that the policy is actually third-party only, while still claiming that I "enjoy the benefits of comprehensive cover" because they handle at-faults claim repairs etc internally and charge a £1,000 excess. 

This appears misleading to me, particularly as some of the documents that I received refers to the insurance as “full comprehensive insurance,” and their website/ads marketed and continues market as such. I’ve since spoken with the FCA, who confirmed the company is not regulated to offer or arrange insurance, and they’ve refused to provide a copy of the fleet insurance policy wording citing business sensitivity / other drivers data cannot be shared due to GDPR. I have asked for redacted version as well, however their response was the same. The contract I have with the company places me as named beneficiary of the insurance policy and which governs my rights and liabilities. As part of the package/agreement I pay for this insurance policy. 

It now feels like I was induced into the agreement under false pretences. Had I known this whole situation at the time, I do not think I would have signed this agreement. I understand since its a business agreement I should have done more due diligence (regretting that now), however I had no reason to suspect until now. I am pretty certain hundreds of other drivers who have the same agreement are completely unaware of this. . 

I now have a damaged car and as per the agreement I am liable for any damages and repairs. For the processing of this non fault claim, the company has referred me to a claims management company and if the third party refuses to pay for all the cost I'll be personally liable as per the credit hire agreement; don't have actual comp cover to fall back on for repairs cost at least. I realise that this so called "internal comprehensive cover" should then be called into action but I suspect, given the kind of responses I have had, they'll bail on me and I won't even have the right to appeal to FOS except for going to the court.

I have considered terminating the contract for the reasons above but the car is damaged so I'm not sure whether I should have the car repaired first and then return/terminate or just simply terminate as it is. 

I am just not sure what to do now and I would appreciate any advice / thoughts.

Thank you very much for your help.

Car_54

"I’ve entered into an unregulated hire purchase agreement for a hire vehicle with a company". Is it hire purchase, hire, lease, or what? And what do you mean by "unregulated".

A £1,000 excess does not mean that the policy is not "fully comprehensive". Most, if not all, comp policies have an excess, and £1k is not out of order.

born_again

msm55 said:

Hi all,

Apologies for the lengthy post. I’m hoping someone here has experience or advice on the situation I’m dealing with. I’ve entered into an unregulated hire purchase agreement for a hire vehicle with a company , who clearly stated, both verbally and in writing that the vehicle came with comprehensive insurance.

After a recent non fault accident, I asked them to confirm the level of cover. Initially, they were reluctant to provide a clear answer, simply pointing to the insurance certificate (which did not state the level of cover). Eventually, they confirmed I have 'full comprehensive policy - which covers where I may be at fault'. Then, a day later, they contradicted themselves by admitting that the policy is actually third-party only, while still claiming that I "enjoy the benefits of comprehensive cover" because they handle at-faults claim repairs etc internally and charge a £1,000 excess. 

This appears misleading to me, particularly as some of the documents that I received refers to the insurance as “full comprehensive insurance,” and their website/ads marketed and continues market as such. I’ve since spoken with the FCA, who confirmed the company is not regulated to offer or arrange insurance, and they’ve refused to provide a copy of the fleet insurance policy wording citing business sensitivity / other drivers data cannot be shared due to GDPR. I have asked for redacted version as well, however their response was the same. The contract I have with the company places me as named beneficiary of the insurance policy and which governs my rights and liabilities. As part of the package/agreement I pay for this insurance policy. 

It now feels like I was induced into the agreement under false pretences. Had I known this whole situation at the time, I do not think I would have signed this agreement. I understand since its a business agreement I should have done more due diligence (regretting that now), however I had no reason to suspect until now. I am pretty certain hundreds of other drivers who have the same agreement are completely unaware of this. . 

I now have a damaged car and as per the agreement I am liable for any damages and repairs. For the processing of this non fault claim, the company has referred me to a claims management company and if the third party refuses to pay for all the cost I'll be personally liable as per the credit hire agreement; don't have actual comp cover to fall back on for repairs cost at least. I realise that this so called "internal comprehensive cover" should then be called into action but I suspect, given the kind of responses I have had, they'll bail on me and I won't even have the right to appeal to FOS except for going to the court.

I have considered terminating the contract for the reasons above but the car is damaged so I'm not sure whether I should have the car repaired first and then return/terminate or just simply terminate as it is. 

I am just not sure what to do now and I would appreciate any advice / thoughts.

Thank you very much for your help.

Can you expand on that. Is this something in relation to taxi hire or another business?

MyRealNameToo

msm55 said:

Apologies for the lengthy post. I’m hoping someone here has experience or advice on the situation I’m dealing with. I’ve entered into an unregulated hire purchase agreement for a hire vehicle with a company , who clearly stated, both verbally and in writing that the vehicle came with comprehensive insurance.

After a recent non fault accident, I asked them to confirm the level of cover. Initially, they were reluctant to provide a clear answer, simply pointing to the insurance certificate (which did not state the level of cover). Eventually, they confirmed I have 'full comprehensive policy - which covers where I may be at fault'. Then, a day later, they contradicted themselves by admitting that the policy is actually third-party only, while still claiming that I "enjoy the benefits of comprehensive cover" because they handle at-faults claim repairs etc internally and charge a £1,000 excess. 

This appears misleading to me, particularly as some of the documents that I received refers to the insurance as “full comprehensive insurance,” and their website/ads marketed and continues market as such. I’ve since spoken with the FCA, who confirmed the company is not regulated to offer or arrange insurance, and they’ve refused to provide a copy of the fleet insurance policy wording citing business sensitivity / other drivers data cannot be shared due to GDPR. I have asked for redacted version as well, however their response was the same. The contract I have with the company places me as named beneficiary of the insurance policy and which governs my rights and liabilities. As part of the package/agreement I pay for this insurance policy. 

It now feels like I was induced into the agreement under false pretences. Had I known this whole situation at the time, I do not think I would have signed this agreement. I understand since its a business agreement I should have done more due diligence (regretting that now), however I had no reason to suspect until now. I am pretty certain hundreds of other drivers who have the same agreement are completely unaware of this. . 

I now have a damaged car and as per the agreement I am liable for any damages and repairs. For the processing of this non fault claim, the company has referred me to a claims management company and if the third party refuses to pay for all the cost I'll be personally liable as per the credit hire agreement; don't have actual comp cover to fall back on for repairs cost at least. I realise that this so called "internal comprehensive cover" should then be called into action but I suspect, given the kind of responses I have had, they'll bail on me and I won't even have the right to appeal to FOS except for going to the court.

I have considered terminating the contract for the reasons above but the car is damaged so I'm not sure whether I should have the car repaired first and then return/terminate or just simply terminate as it is. 

I am just not sure what to do now and I would appreciate any advice / thoughts.

Thank you very much for your help.

Would be easier if you named the company so we can see for ourselves what they are stating. 

So you have a business vehicle on HP that is covered by the hirer's fleet policy which you believe is TPO, however they state they will deal with any own vehicle damage outside of a non-fault accident subject to a £1k excess? 

What does your actual contract state about these matters?

How did/does the insurance side of the deal work? Do you have to give them all the details of the allowable drivers each year like you would a motor insurer or is it much less onerous? The FCA does take reports of people doing regulated activities without proper authorisation from the public but not fully convinced that adding you to a fleet policy would necessarily be considered regulated activity. 

Is that your interpretation of the CMC setup or what you have explicitly been told? Credit hire would typically work that your liability is capped to what they get out of the third party unless you fail to support their recovery, refuse to follow their instruction or commit fraud. If there is other reason why they cannot get their money back then they absorb the loss... it's why credit hire rates are so high. 

Mildly_Miffed

The difference between Comp and TPFT is whether your insurance covers the damage to your own vehicle.

If they internally underwrite the damage, bar the £1k excess, then that's certainly near-as-dammit the same thing as having an external underwriter reinsure that damage. Who ultimately foots the bill differs, but it's not you.

If the other party's insurer agree they're liable, then go direct to them with your claim. They'll provide you with a car and sort your repairs.

If there's a chance that the other party's insurer will dispute liability, then that's where your claim against your own insurance (whether fully underwritten or via the financier) comes in, along with the AMC/Credit-Hire provider.

msm55

Car_54 said:

"I’ve entered into an unregulated hire purchase agreement for a hire vehicle with a company". Is it hire purchase, hire, lease, or what? And what do you mean by "unregulated".

A £1,000 excess does not mean that the policy is not "fully comprehensive". Most, if not all, comp policies have an excess, and £1k is not out of order.

It's rent-to-buy scheme, whereby I have the option of returning the car after 6 months with 4 week notice and pay termination fee.
And yes, excess of any amount does not mean the insurance is not fully comprehensive. The fact they have £1000 excess implies/implied that the cover is fully comprehensive, however in actual fact it is not, it's third party only. 

Problem is that (I think) they misled about that fact. They did not until recently, even then with great reluctance and constant push back, disclosed that it's third party only and not comprehensive; after having marketed on their website and the documents they gave once I signed the agreement states 'fully comprehensive'. To my question 'What is the level of cover provided under the insurance certificate you have shared with me?' They replied 'It's fully comprehensive insurance' Until a day later, they changed their statement to TPO. Their explanation on this contradiction 'there was a misunderstanding' and that "you enjoy fully comprehensive insurance cover and all of the benefits, however our policy is technically third party only. What this means is that, in the event of an at-fault accident, the company will arrange and pay for the repairs to the vehicle using our trusted supplier network, and you will pay a £1,000 excess towards these repairs. This is how your coverage is fully comp, for all intents and purposes." This is not what I was told nor their documents reflect. The agreement mentions the insurer's name which provides third party insurance policy and does not mention anything in relation to their internal arrangement and the so called comprehensive cover. 

My contention / problem is that to provide an insurance or insurance like, as is the case here, you have to be regulated by the FCA. You cannot hide that you do not have the agreed and marketed level of cover or mislead about the nature of it. You cannot call the above to be an insurance policy let alone a comprehensive one.

msm55

born_again said:

Can you expand on that. Is this something in relation to taxi hire or another business?

Yes, It's Licensed Private Hire Vehicle, so like mini-cab. 

msm55

MyRealNameToo said:

Would be easier if you named the company so we can see for ourselves what they are stating. 

So you have a business vehicle on HP that is covered by the hirer's fleet policy which you believe is TPO, however they state they will deal with any own vehicle damage outside of a non-fault accident subject to a £1k excess? 

What does your actual contract state about these matters?

How did/does the insurance side of the deal work? Do you have to give them all the details of the allowable drivers each year like you would a motor insurer or is it much less onerous? The FCA does take reports of people doing regulated activities without proper authorisation from the public but not fully convinced that adding you to a fleet policy would necessarily be considered regulated activity. 

Is that your interpretation of the CMC setup or what you have explicitly been told? Credit hire would typically work that your liability is capped to what they get out of the third party unless you fail to support their recovery, refuse to follow their instruction or commit fraud. If there is other reason why they cannot get their money back then they absorb the loss... it's why credit hire rates are so high. 

I am just not sure whether I should reveal their name in public as I do not want them coming after me for any kind of defamation. 

The contract does not mention anything related to what their current position is (in the post/comment above). The contract states the insurer's name who provides the third party policy and I will be the named beneficiary under their policy, as long as I am eligible and I will pay a charge for it. Not sure if this is relevant but it also states if I'm notified that I have I am no longer eligible under their policy, I will have to make sure that at all times I have suitable comprehensive cover in place and register their interest in that cover. Perhaps, expecting something that they themselves have failed to provide and lied? 

I had to provide my personal and license details etc before I signed the agreement. And yes you're right, that adding me the their policy most probably does not violate FCA regs and that is not the issue.

And regarding CMC, that my what interpretation was until now at least CMC charging extortionate for hire etc and me being liable for it kind of spooked me. Not to mention the fact, I do not have actual comprehensive policy by an actual insurance company. 

I hope the above clarifies things a little

MyRealNameToo

msm55 said:
My contention / problem is that to provide an insurance or insurance like, as is the case here, you have to be regulated by the FCA. You cannot hide that you do not have the agreed and marketed level of cover or mislead about the nature of it. You cannot call the above to be an insurance policy let alone a comprehensive one.

To sell insurance you must be regulated by the FCA or be an Authorised Representative of a firm that is, with some slight exceptions. 

"Insurance like" does not require regulation because its not insurance hence why the likes of Currys spent a lot of time and effort crafting their products to ensure they weren't insurance, but had to bite the bullet with mobiles and tablets that are insurance.

Who is the firm? Would be useful to see what they are stating first hand.  

msm55

Mildly_Miffed said:

The difference between Comp and TPFT is whether your insurance covers the damage to your own vehicle.

If they internally underwrite the damage, bar the £1k excess, then that's certainly near-as-dammit the same thing as having an external underwriter reinsure that damage. Who ultimately foots the bill differs, but it's not you.

If the other party's insurer agree they're liable, then go direct to them with your claim. They'll provide you with a car and sort your repairs.

If there's a chance that the other party's insurer will dispute liability, then that's where your claim against your own insurance (whether fully underwritten or via the financier) comes in, along with the AMC/Credit-Hire provider.

Well if that's the case then it should have mentioned that we have such mechanism in place and do not call it full comprehensive insurance. 
I understand and can see why on surface it might be functionally equivalent, but I think there are several key reasons why it's not the same as having actual comprehensive policy by an actual insurance provider.

1. Regulatory protections: With a proper insurance policy, especially comprehensive cover, I would be protected under FCA rules and the Financial Ombudsman Scheme. This company is not FCA-authorised to provide or administer insurance. So, if they refuse to “internally fund” repairs (say in a borderline case), I have no recourse through the usual regulated channels. No mention in the agreement either directly or vaguely.

2. Contractual uncertainty: Their position is discretionary. They say they will repair damage, but this is not backed by a transparent policy document or clear contractual terms that lay out exclusions, limits, procedures, etc. Unlike a standard insurance product, this internal promise lacks any oversight. Again, the agreement does not mention anything related to this. 

3. Misrepresentation (I think): They marketed and continue market it as “comprehensive insurance,” and the Vehicle Driver Handbook uses that phrase. At no point was it made clear that it was not insurance underwritten by an authorised insurer. I think that distinction matters, both legally and practically. I only discovered the truth after the accident, after repeatedly pressing them for clarity.

4. Excess: They say a £1,000 “excess” payable to the company, despite offering no policy terms that define how or when this applies. It creates an illusion of insurance-like structure, but with none of the legal infrastructure to back it up.

5. claims management: If I were to make a claim through real insurance, the insurer, not the company, would be the one managing liabilities, repair etc. Here, the company is essentially playing insurer, repair coordinator, and claims handler all in one, without oversight or clear rights for me

paul_c123

This is business-to-business though, not consumer-business. A whole bunch of regulatory protections are no longer present and you need to be an order of magnitude more savvy with reading and signing contracts etc, especially those which are critical to the success or ability to do business.