CAR INSURANCE CANCELLED WITH NO FAULT ACCIDENT

Bobby4puddings

Hi, a question on behalf of my daughter.
3 or 4 months ago she had a damage only non fault accident when a taxi came onto a roundabout and hit her car. Her car was written off.
An independent witness gave his details clearly blaming the taxi driver, who also admitted fault at the scene. She informed her insurers Tesco of the accident.
Tesco later contacted her and said the other parties insurance had admitted liability. They were to pay Tesco for the damage of the written off vehicle (about £8k) and had 90 days to pay it. (fortunately her employers have now given her a company car)
Meanwhile my daughter carried on paying Tesco her monthly insurance payments.
Today, 9th Dec she got a letter in the post from Tesco saying they were cancelling the insurance as the other insurance had not paid within the 90 days. Tesco also wanted nearly £300 off her within 7 days for insurance owed. If she did not pay it would be sent to a debt agency.
The letter was dated in November and she only got it today, out of the 7 day period.
She phoned Tesco, explained and offered to pay the money, they told her basically, tough. They had already informed the debt agency, the policy has been cancelled and they can do nothing about it.
She is now beside herself, the cancelled insurance will be with her forever and any insurance will be sky high.
This is grossly unfair, she has a independent witness she was not to blame, the other side admitted liability at the scene, and the other parties insurance also admitted liability to Tesco. She has done everything correct and honestly by the book, even continuing to pay her monthly instalments. She had no idea the other side had not paid Tesco until she got the letter after the 7 days.
Has anybody any thoughts on what she can do?
Thanks

jaybeetoo

Raise a formal complaint with Tesco.  If they send her a deadlock letter or 8 weeks have passed since the complaint, take it to the insurance ombudsman.

Bobby4puddings

Thanks for your reply.

eddddy

Bobby4puddings said:

Meanwhile my daughter carried on paying Tesco her monthly insurance payments.
Today, 9th Dec she got a letter in the post from Tesco saying they were cancelling the insurance as the other insurance had not paid within the 90 days. Tesco also wanted nearly £300 off her within 7 days for insurance owed.

It might be worth posting this question on the "Insurance board" - there are a number of Insurance professionals there:  https://forums.moneysavingexpert.com/categories/insurance-life-assurance


But TBH, I wonder if you have misunderstood...

Why would your daughter owe Tesco £300 as a result of the 3rd party insurers failing to pay around £8k within 90 days?

TBH, it sounds more plausible that your daughter either cancelled her insurance direct debit to Tesco, and/or failed to cancel an auto-renewal - and therefore ran up a debt of £300.

And so her policy was cancelled for non-payment of premiums. (i.e. It was nothing to do with the £8k from the other insurer.)

It might be because of an innocent mis-understanding by your daughter... i.e. She thought it was OK to  cancel her direct debit or not pay the renewal premium, as her car was written off.


Has your daughter received the £8k for her written off car? Now her policy has been cancelled, I don't know whether Tesco will continue to chase the 3rd party to get the money.


But in any case, she should do anything she can to get the cancellation reversed - e.g. explain her innocent mis-understanding and apologise. And if the warning letter didn't arrive within 7 days, she should also mention that.



Edit to add...

Bobby4puddings said:

(fortunately her employers have now given her a company car)

I guess your daughter might need to tell her Employer's Company Car Administrator about her cancelled insurance, as they might have to inform their fleet insurers.

Otherwise, if she has a crash in the company car, she might have even bigger problems.

(Unfortunately, having a cancelled policy against her name probably classes your daughter as a "high risk" driver. Hopefully her employer won't have a policy of not allowing "high risk" drivers to drive company cars.)

MyRealNameToo

Bobby4puddings said:

Hi, a question on behalf of my daughter.
3 or 4 months ago she had a damage only non fault accident when a taxi came onto a roundabout and hit her car. Her car was written off.
An independent witness gave his details clearly blaming the taxi driver, who also admitted fault at the scene. She informed her insurers Tesco of the accident.
Tesco later contacted her and said the other parties insurance had admitted liability. They were to pay Tesco for the damage of the written off vehicle (about £8k) and had 90 days to pay it. (fortunately her employers have now given her a company car)
Meanwhile my daughter carried on paying Tesco her monthly insurance payments.
Today, 9th Dec she got a letter in the post from Tesco saying they were cancelling the insurance as the other insurance had not paid within the 90 days. Tesco also wanted nearly £300 off her within 7 days for insurance owed. If she did not pay it would be sent to a debt agency.
The letter was dated in November and she only got it today, out of the 7 day period.
She phoned Tesco, explained and offered to pay the money, they told her basically, tough. They had already informed the debt agency, the policy has been cancelled and they can do nothing about it.
She is now beside herself, the cancelled insurance will be with her forever and any insurance will be sky high.
This is grossly unfair, she has a independent witness she was not to blame, the other side admitted liability at the scene, and the other parties insurance also admitted liability to Tesco. She has done everything correct and honestly by the book, even continuing to pay her monthly instalments. She had no idea the other side had not paid Tesco until she got the letter after the 7 days.
Has anybody any thoughts on what she can do?
Thanks

I think there is a notable breakdown in communication, not sure if it's between your daughter and Tesco or daughter and you. 

The first thing to check is the letters/emails in connection with the total loss as I am fairly sure Im right but occasionally Im not. 

Traditionally when a vehicle was total lossed, irrespective of blame, the insurer would terminate your policy as it has fulfilled its ultimate goal of writing off the vehicle. For those that have taken a loan from the insurer to pay the premiums monthly then the total loss payment would be the value of the car less the excess and less the value of the load (and less the value of the salvage if the insured was keeping it). 

The Ombudsman, in its wisdom, decided this wasnt very fair and so in most cases require the insurer to allow the policyholder to transfer the remainder of the policy term onto a replacement vehicle. It however acknowledged the finance complexity of having a load of paused policies and accepts insurers placing a time limit in which the insured must have acquired the replacement vehicle. 

So it sounds like in this case rather than deduct the value of the loan from the total loss settlement they have allowed her to continue repaying the loan monthly and told her she can transfer the remainder of the policy within 90 days. Given she has a company car she doesnt have anywhere to transfer the policy onto and so now the 90 day window has closed and the remainder of the loan is repayable. The reason why insurers would normally deduct the payment from the total loss is that customers become very bad payers when they feel they are no longer getting anything for their money!

facade

What exact word did Tesco use to say what happens to her policy?

The correct word should be terminated not cancelled.

Her policy has terminated because she no longer has a car to insure on it. She doesn't get a refund because her policy has paid out. She owes the remainder of the policy premium (because she claimed on it).

Unusual that she had to continue with monthly payments, as normally the insurer takes the remainder of the premium out of the payout, because most people refuse to continue to pay insurance premiums on a car that doesn't exist, and it costs the insurer time & money to explain why they have to, then pursue them through the Courts for the money if they still won't pay.

(Maybe she told them she was replacing the car and transferring the policy to the replacement?)

A termination is not a cancellation, and doesn't have to be declared.

Herzlos

What's my assumption of what's happened to. Did she tell Tesco she was getting another car and failed to mention that it was a company car and was insured elsewere?

If so, the issue is that she's timed out on replacing the car and owes the rest of the years insurance premium. 

If it was related to the 3rd party not paying Tesco, then she'd only be on the hook for the excess (maybe £700) and it'd be logged as an at fault claim. But that'd be completely independent of whether her insurance policy was terminated or not. 


In either case you need to look at all of the paperwork *now* and then phone them to sort it it. 

born_again

jaybeetoo said:

Raise a formal complaint with Tesco.  If they send her a deadlock letter or 8 weeks have passed since the complaint, take it to the insurance ombudsman.

financial ombudsman service (fos) 👍

shera12

I’d say don’t panic, this sounds unfair, but there are steps she can take. She should:

1. Write to Tesco explaining she’s not at fault, the other driver admitted it, and she’s kept up with payments.

2. Keep all accident reports, witness details, and messages. These will help.

3. If Tesco still won’t help, she can contact the Financial Ombudsman to dispute the cancellation.

4. Check with other insurers, some will still give fair quotes for non-fault claims.

She did everything right, so it’s worth pushing back calmly and formally.

soolin

shera12 said:

I’d say don’t panic, this sounds unfair, but there are steps she can take. She should:

1. Write to Tesco explaining she’s not at fault, the other driver admitted it, and she’s kept up with payments.

2. Keep all accident reports, witness details, and messages. These will help.

3. If Tesco still won’t help, she can contact the Financial Ombudsman to dispute the cancellation.

4. Check with other insurers, some will still give fair quotes for non-fault claims.

She did everything right, so it’s worth pushing back calmly and formally.

It might pay to read the rest of the thread are there are a few issues that would change the response, depending on wording and what is actually being claimed. There's no point approaching Tesco until the actual facts are known to ensure there is not a simple misunderstanding.

Bobby4puddings

For any car insurance specialists.
Hi, a question on behalf of my daughter.
3 or 4 months ago she had a damage only non fault accident when a taxi came onto a roundabout and hit her car. Her car was written off.
An independent witness gave his details clearly blaming the taxi driver, who also admitted fault at the scene. She informed her insurers Tesco of the accident.
Tesco later contacted her and said the other parties insurance had admitted liability. They were to pay Tesco for the damage of the written off vehicle (about £8k) and had 90 days to pay it. (fortunately her employers have now given her a company car)
Meanwhile my daughter carried on paying Tesco her monthly insurance payments, she has not missed any payments whatsoever.
Today, 9th Dec she got a letter in the post from Tesco saying they were cancelling the insurance as the other insurance had not paid within the 90 days. Tesco also wanted nearly £300 off her within 7 days for insurance owed. If she did not pay it would be sent to a debt agency.
The letter was dated on 28th November and she only got it today (9/12/2025), out of the 7 day period.
She phoned Tesco, explained and offered to pay the money, they told her basically, tough. They had already informed the debt agency, the policy has been cancelled and they can do nothing about it.
She is now beside herself, the cancelled insurance will be with her forever and any insurance will be sky high.
This is grossly unfair, she has a independent witness she was not to blame, the other side admitted liability at the scene, and the other parties insurance also admitted liability to Tesco. She has done everything correct and honestly by the book, even continuing to pay her monthly instalments. She had no idea the other side had not paid Tesco until she got the letter after the 7 days.
Has anybody any thoughts on what she can do?
Thanks