Car Insurance, write offs & [non]refunds?

B0bbyEwing

One of our cars was recently written off & the policy was with Direct Line. There was about 3-4 months left on the policy.

They paid out for the car, minus the excess (as fully expected) but then also minus deductions for other damage like scuffs (not expected).

I then asked OH how it's going with the refund on the car insurance. No I wasn't expecting the full amount, just the months that weren't used - similar to when you get a refund on tax.

Turns out in their T&Cs there is no refund if we've understood correctly & that's why I'm here - is this correct? Also is that standard procedure across the board, regardless of which company you insure with or are some companies not like that?

I suppose on the bright side we were only 3-4 months out. It would've been a real kicker if we'd just taken insurance out 1 week ago & then have 51 weeks we've not used that we get no refund for. Plus at least it's only about £300 for the year-ish & not like 5 grand or whatever other stupid figures these youngsters have to pay these days.

Just doesn't seem 'right', even if it's right.

Aretnap

Yes it's standard across the board - insurance is an annual contact, and if the policy is cancelled pay way through the year, a refund is only due if a no claim has been made. 

The industry should, however, b show you to transfer any remaining months on the policy to a replacement car. Subject to the replacement car being one that they would normally be happy to insure you to drive, and payment of any premium difference (so it's worth checking those things before you but a replacement car).

MyRealNameToo

Its standard practice as the policy has reached its ultimate end with the vehicle being written off. You can however transfer the remainder of the policy onto a new vehicle if it's purchased fairly promptly. Exact time limit varies between insurers but most are at around 28 days. 

Mildly_Miffed

B0bbyEwing said:

One of our cars was recently written off & the policy was with Direct Line. There was about 3-4 months left on the policy.

They paid out for the car, minus the excess (as fully expected) but then also minus deductions for other damage like scuffs (not expected).

I then asked OH how it's going with the refund on the car insurance. No I wasn't expecting the full amount, just the months that weren't used - similar to when you get a refund on tax.

Turns out in their T&Cs there is no refund if we've understood correctly & that's why I'm here - is this correct? Also is that standard procedure across the board, regardless of which company you insure with or are some companies not like that?

I suppose on the bright side we were only 3-4 months out. It would've been a real kicker if we'd just taken insurance out 1 week ago & then have 51 weeks we've not used that we get no refund for. Plus at least it's only about £300 for the year-ish & not like 5 grand or whatever other stupid figures these youngsters have to pay these days.

Just doesn't seem 'right', even if it's right.

But the policy has done its job.

They paid out in full for the car that you damaged so badly it was not worth repairing.

Read the terms and conditions - I bet they state clearly that there's no refunds after a total loss payout. That is indeed standard across the industry. Why would they?

They may allow you to add another car for the balance of the policy, though you will need to check.

BridgetTheCat

It is right. The premium is for the full year. They were doing you a favour by allowing you to pay it in instalments. If you bought a TV on monthly payments and you dropped and broke it, you’d still have to pay all the instalments.

B0bbyEwing

Not sure how we've got to the point where I'm asked to read the T&Cs & then apparently I'm paying in instalments.

Both of these I covered in my OP. 

Aside from that, thanks for the feedback. 

born_again

B0bbyEwing said:

Not sure how we've got to the point where I'm asked to read the T&Cs & then apparently I'm paying in instalments.

Both of these I covered in my OP. 

Aside from that, thanks for the feedback. 

When paying monthly. You have taken out a loan to pay the ins in full. So if policy ends early. There is still interest & charges to pay back.

sheramber

born_again said:

B0bbyEwing said:

Not sure how we've got to the point where I'm asked to read the T&Cs & then apparently I'm paying in instalments.

Both of these I covered in my OP. 

Aside from that, thanks for the feedback. 

When paying monthly. You have taken out a loan to pay the ins in full. So if policy ends early. There is still interest & charges to pay back.

I think the OP’s point in they did not mention paying in instalments and since they expected a refund for the unused months it would appear that  the premium had been paid in full. 

B0bbyEwing

sheramber said:

born_again said:

B0bbyEwing said:

Not sure how we've got to the point where I'm asked to read the T&Cs & then apparently I'm paying in instalments.

Both of these I covered in my OP. 

Aside from that, thanks for the feedback. 

When paying monthly. You have taken out a loan to pay the ins in full. So if policy ends early. There is still interest & charges to pay back.

I think the OP’s point in they did not mention paying in instalments and since they expected a refund for the unused months it would appear that  the premium had been paid in full. 

Exactly this. 

If I was paying monthly I imagine I'd just stop paying. 

Maybe that's not how it works & they'd want you to keep paying & maybe this is why some think I'm paying in instalments. 

But to clarify - no, it was paid in full. 

facade

B0bbyEwing said:

<snip>

If I was paying monthly I imagine I'd just stop paying. 

<snip>

Most people would, so the insurer will simply deduct the remaining balance from any total loss payout! (They aren't stupid )

Insurance is more like a lottery ticket than a bet, once it pays out you cannot get your stake back.

You can only get a refund on unused months (less an admin charge) if there are no claims made or pending on the policy.

Goudy

In the event of a total lost being made and paid out, the policy is considered settled.
You insured that car and they have paid out and settled the policy in full, so that's the end of that policy.

Some will mistakenly think the policy have been cancelled, this is not the case.
It's just been settled. So when asked in future, you declare the claim obviously but you do not state the policy has been cancelled.

Some will let you transfer it to another vehicle but the ones that allow this usually have a fairly short cut off time to do this, often around 30 days. (the clock can start ticking when they make their settlement offer)

As far as paying monthly, yes it's possible to have a total loss in the first few days of the policy or any time in between and you would still be expected to pay the total policy premium.
As mentioned, they aren't silly so will usually adjust the pay out of the claim to account for this.
As it's a loan, they have to adjust the "settlement figure" of that loan to account for early settlement in regards to interest.

Depending on the claim, it is possible for you to still owe them after they have adjusted the payout to take the loan into account. If the payout is less than amount owed still on the premium, you would still owe them the outstanding amount.