car insurance problem

naav

Hi everyone. :cheesy:

I was wondering if someone could advise on the following problem a close friend of mine's is having with his former insurance company.

He was involved in a car accident along with 2 or 3 other cars, hitting each other, one after the other, with his happening to be the last car. As a consequence he was made liable for the collision with the car in front of him. His former insurance company are asking for a reimbursement of £14000! They claim this is a result of him not disclosing the penalty points on his license. He says it never occured to him to mention the penalty points when he first took out the insurance with them. However, the fact is he was insured with them at the time of the accident. Now he has three weeks to confirm payment or they will take legal action.

Thank you :cheesy:

MarkyMarkD

It's almost always the fault of a car hitting another in the rear. He was driving too close to stop when the other cars stopped - it was his fault.

Now, regarding the non-disclosure, the insurer can definitely choose to void the insurance policy for non-disclosure of material facts. And penalty points are definitely material. Insurers sometimes choose to simply recalculate the premium on the basis of the corrected disclosure, and meet the claim. But there's no reason why they have to do so, and they'd be mad to do so in this circumstance.

Saying "it never occurred to him" is frankly pathetic. It's a standard question on every motor insurance policy proposal - have you had any convictions. He had, and he chose not to disclose them. He's a muppet.

So, all in all, he's liable for the £14k.

naav

Hi, thanks for the reply.

So, all in all, he's liable for the £14k.

Oh boy, that's not good news :embarasse

He says his friend set up the car insurance for him so he didn't know anything about it. He's spoken to someone from the Citizens Advice Bureau and due to the fact he hasn't got that kind of money they say he could get away with it by being 'listed' under credit history for a couple of years and so couldn't buy a home or something like that.

firesidemaid

was his friend who set up the insurance for him a broker?

did the friend have all his details etc to hand? i do feel for your friend, but as with all insurances you have to give them all the details, changes etc. they will always try and find a way NOT to pay out etc

Riq

MarkyMarkD wrote: »

It's almost always the fault of a car hitting another in the rear. He was driving too close to stop when the other cars stopped - it was his fault.

Not always true.
This exact same crash scenario happened to me. I was held liable but it wasn't my fault for being too close.

I was happily following a car with plenty of room, when this van pulled out right into my braking zone and within seconds slammed on his brakes to stop.

The point was I could not prove what happened, I knew what happened, the van driver knew what happened, but I just couldn't prove it.

nickmack

naav wrote: »

His former insurance company are asking for a reimbursement of £14000! They claim this is a result of him not disclosing the penalty points on his license. He says it never occured to him to mention the penalty points when he first took out the insurance with them. However, the fact is he was insured with them at the time of the accident. Now he has three weeks to confirm payment or they will take legal action.

What is the £14,000 for? Is this premiums or to cover damage caused to other vehicles in the accident?

Certainly non-disclosure is a serious matter and endorsements are a standard question for every motor insurer. He *would* have been asked this question, so from your OP, it *sounds* like the non-disclosure could have been deliberate.

There are however provisions within the complaints system of the Financial Ombudsman to allow customers who have genuinely overlooked some material facts to still receive cover.

This would depend on the circumstances, for example if they received points for several offences at once and didn't realise they all applied. If it was set up through a broker, although they should have checked the details, this could be regarded as an oversight rather than a deliberate attempt to mis-represent the risk.

It could also depend if the insurer would still cover the actual level of risk calculated by the endorsements being notified. If they would, the claim settlement could be paid out accordingly after the additional premium has been calculated.

raskazz

I really don't think that there is any way out of this. His explanation as to why the convictions were not disclosed borders on the reckless, so the insurer is quite entitled to avoid the policy and recover the claims cost. If the non-disclosure was inadverent or innocent then the insurer may have offered indemnity suject to a rewritten policy, but the policyholder's explanation has now ruled this option out.

naav

Thanks for the replies

was his friend who set up the insurance for him a broker?

No, he says one of his friends set it up for him.

What is the £14,000 for? Is this premiums or to cover damage caused to other vehicles in the accident?

I briefly read the letter he got from them...it was injury costs to the other driver, car repair costs, solicitor costs...he says himself, if it came to a couple of thousands he would sort of accept more readily...but £14000...he says they are treating each of the accidents (in this one big accident) separately...

Thanks.

dunstonh

The FOS have published guidelines on non disclosure and how insurance companies should act. They look at accidental non disclosure differently to intentional non disclosure. The latter is of course fraud.

For motor convictions, they did publish an example that people may forget points from speeding if more than 4 years ago but would have a hard job forgetting about them if they were in the last 3 years. So they would consider that intentional non disclosure normally.

It is the responsibility of the driver to ensure that they are correctly insured. So, using the friend excuse isnt going to help the situation unless that friend was their spouse/partner.

MarkyMarkD

Riq wrote: »

Not always true.
This exact same crash scenario happened to me. I was held liable but it wasn't my fault for being too close.

I was happily following a car with plenty of room, when this van pulled out right into my braking zone and within seconds slammed on his brakes to stop.

The point was I could not prove what happened, I knew what happened, the van driver knew what happened, but I just couldn't prove it.

I understand your point, but that isn't what happened to the OP's friend. They simply drove into the back of other cars who had stopped suddenly because of an accident - because they were driving too close, or with insufficient attention.

sassybooboos

did he not read his policy when it was sent to him, they usually say what points etc you have and if policy wrong to phone them etc.