Car insurace pay out

[junior]

I'm hoping for a bit of the famous NSC wisdom here.

About 3 or 4 months ago my car was written off and the insurace company paid out in full. I bought a new car and took out insurace for that car with a different company (cheapest on compare the market).

I noticed after a few months that the old insurance company for the car that was written off were still taking the direct debit out of my bank account. Guessing that was an error on their part or they were just being snidey bastards, I cancelled the direct debit from my end.

I have just had a phone call from the insurace company (Budget Insurance) telling me that my insurance policy had been cancelled. I said no shit sherlock, the car was written off 4 months ago and you paid out, of course it's cancelled.

She finished the call by telling me I owed them £600 because i've stopped the direct debits. I've never had to make an insurance claim before so i'm not sure exactly how it works, but surely that cant be true?? I've just asked the 4 other guys in my office and they've all said they have written cars off and not had to carry on paying after the payout.

I don't have £600.

 

[Racek]

I'm hoping for a bit of the famous NSC wisdom here.

About 3 or 4 months ago my car was written off and the insurace company paid out in full. I bought a new car and took out insurace for that car with a different company (cheapest on compare the market).

I noticed after a few months that the old insurance company for the car that was written off were still taking the direct debit out of my bank account. Guessing that was an error on their part or they were just being snidey bastards, I cancelled the direct debit from my end.

I have just had a phone call from the insurace company (Budget Insurance) telling me that my insurance policy had been cancelled. I said no shit sherlock, the car was written off 4 months ago and you paid out, of course it's cancelled.

She finished the call by telling me I owed them £600 because i've stopped the direct debits. I've never had to make an insurance claim before so i'm not sure exactly how it works, but surely that cant be true?? I've just asked the 4 other guys in my office and they've all said they have written cars off and not had to carry on paying after the payout.

I don't have £600.

Will have to sell the new car and pay them then.

 

[Rugrat]

I wrote a car off a few years ago, got paid, policy cancelled. But if you've been paying in instalments maybe they do have a right to collect a full years premium, it should be fairly explicit in the T&C's. If it isn't I've got a mate who's a senior bloke at Swiftcover and can ask him for a steer

 

[Racek]

Can you cancel it if you sell the car? If so, is it not the same if you write it off?

 

[StonehamPark]

Just keep pushing to get on the phone to the most senior person in the office, not the jobsworths on the phones. Higher management will sort it.

 

[junior]

Can you cancel it if you sell the car? If so, is it not the same if you write it off?

Thats what I though.

But the more I think about this the more I think i might have a problem.

If I sold the car and cancelled, it wouldnt actually cost them anything. If the car is written off and I (they) cancel the policy, it's actually cost them £12k and all i've paid them is 4 x £68 installments. I guess that could explain why they are trying to get another £600 off of me.

Hopefully I can find a way out of this as I am trying to start up my own buisness and cant afford to give them £600

 

[Prettyboyshaw]

If you have a claim like that the annual premium is payable so yes its due, you should have done a change of vehicle on with the current Insurer and carried on the current policy for the remaining part of the year and just paid or get back any difference in premium for the new car. They have meet their obligation by paying a claim so the clients obligation is to pay the premium.

 

[father_and_son]

I work for a large insurance company with 20+ years in the industry and in the event of a write off, the full premium is due. The credit agreement to pay by instalments is actually a separate contract to the insurance policy and in the policy you should find some explicit statement to the effect of...
"In the event of a claim, no refund is due" - this is the critical bit - the company has held up their end and paid out for a legitimate claim, you need to hold up your end and pay for the policy (sorry, but that's the way it is).

Had you kept the policy running you would normally have had a month or so to replace the written off car and you could have run the policy to renewal only paying the extra for the change of car.

If the claim wasn't your fault then your insurer should be able to claim all their outlay back from the other insurer and you have a legitimate complaint that you don't need to pay the balance (although there may be cancellation fees you do have to pay).

All of this should be very clear in your policy document and the terms under which you could have replace the car and kept the insurance running should have been in your settlement letter or discussed over the phone. If they have failed to make everything clear to you, you might have a case to take to the insurance ombudsman, but you'll only get a ruling in your favour if the insurer has actually f*cked up in some way. If you think they didn't make it clear in the paperwork or the conversations then complain first to the Insurer (details will be in the policy wording) and if they won't help, you could take it to the ombudsman.


Happy to help if you have specific questions (pm me).

 

[Racek]

Thats what I though.

But the more I think about this the more I think i might have a problem.

If I sold the car and cancelled, it wouldnt actually cost them anything. If the car is written off and I (they) cancel the policy, it's actually cost them £12k and all i've paid them is 4 x £68 installments. I guess that could explain why they are trying to get another £600 off of me.

Hopefully I can find a way out of this as I am trying to start up my own buisness and cant afford to give them £600

No wonder there are so many people driving around in shitty cars and don't bother don't bother insuring them. Best of luck.

 

[smeariestbat]

its not their fault your car got written off. you dont pay for car insurance in a month by month basis, you pay for the year and your premium is spread over the twelve months. you can cancel your policy early and just pay a cancellation fee if you have not made a claim. However if you make a claim on your policy the whole premium is due.

 

[Rugrat]

I'm hoping for a bit of the famous NSC wisdom here.

Spoke to my mate at Swiftcover and he says is fairly standard if you are paying an annual premium monthly. I suggested it might be more sensible to deduct any outstanding Premium from what was paid out ... he replied saying these are Insurance companies, they're not sensible. But you shouldn't have to pay a full year, even though it's a write off the policy is cancelling early so there might be penalties but not a full year premium.

He also said Budget are a broker so all they do is collect premiums on behalf of Insurer ... your certificate should show the Insurer and it might be an idea to get hold of them if Budget play hardball

 

[Prettyboyshaw]

Spoke to my mate at Swiftcover and he says is fairly standard if you are paying an annual premium monthly. I suggested it might be more sensible to deduct any outstanding Premium from what was paid out ... he replied saying these are Insurance companies, they're not sensible. But you shouldn't have to pay a full year, even though it's a write off the policy is cancelling early so there might be penalties but not a full year premium.

He also said Budget are a broker so all they do is collect premiums on behalf of Insurer ... your certificate should show the Insurer and it might be an idea to get hold of them if Budget play hardball

Waste of time, if they have paid a claim they have met their liability and the whole premium is due. If it was paid up front no return would have been given when the policy was cancelled so if paying monthly you still have to pay the balance.

As I mentioned, he should have just done a change of vehicle and carried on Insuring the new car with them for the remaining part of the the policy.

 

[Rugrat]

Waste of time, if they have paid a claim they have met their liability and the whole premium is due. If it was paid up front no return would have been given when the policy was cancelled so if paying monthly you still have to pay the balance.

As I mentioned, he should have just done a change of vehicle and carried on Insuring the new car with them for the remaining part of the the policy.

OK .. should have said the bit about refund for unexpired term was my thinking ... looks like you're in the know so appears junior is stuffed

 

[smeariestbat]

OK .. should have said the bit about refund for unexpired term was my thinking ... looks like you're in the know so appears junior is stuffed

i wouldnt say stuffed to be fair. liable to pay for the insurance policy he took out and then claimed on would be more accurate.

 

[smeariestbat]

look at it this way, if you had only paid one months direct debit, then claimed on the insurance, then cancelled the policy, do you really think you wouldnt have to pay the rest of the premium?

 

[Box of Frogs]

look at it this way, if you had only paid one months direct debit, then claimed on the insurance, then cancelled the policy, do you really think you wouldnt have to pay the rest of the premium?

Exactly!! Yes you would! As has been said before, the insurance is due in full at the start of the policy. The insurance company are accommodating you by allowing you to pay that premium in installments. If you make a claim, then the full amount becomes due be it on the first day of the policy, the last day or at any time in between.

Imagine you took out insurance, to be paid on installments, and wrote your car off the next day. Do you think it right that you could then cancel your policy without paying the other 364 days of premium but still claim for the full value of your car?

Check the policy documents, it WILL all be in there.

 

[GYM]

I've not read the whole thread.

My experience when I wrote my car off.

I'd paid a full years premium upfront wrote my car off after 6 months.

My insurance wasn't cancelled and I just informed my provider the new reg plate and carried on for the rest of the year.

Obviously I don't have this experience of paying in monthly installments but I can't see a company cancelling your policy and losing more money.

 

[Shropshire Seagull]

Hmmm, T&Cs are always what must be followed. However ....
Forgetting just for now the monthly installment bit, surely the policy is accident risk and cover for 12 months.
Doesn't sound right that if you write of the car on day 2 then you still owe for the other 363 days even though the vehicle is no longer at risk [you cant drive it and no one will want to nick it]?

Just imagine how that might work on life insurance [always paid in installments] - 25 year policy starts and you die after one week, do you still owe then 24 years & 51 weeks of the policy? Probably a big wack for most ??

 

[Lady Whistledown]

Yes but you'd be dead, so it wouldn't be an issue!

 

[smeariestbat]

but what you are purchasing with car insurance, is a 12 month policy. its up to you if you spread it over monthly payments or not, what you have bought is a product. You have bought, to whatever value, a 12 month car insurance policy. You may claim on this policy at any point over the twelve period. At whatever point you claim, the fact still stands that you have bought a 12 month policy, it is not the fault of the insurance company if you need to claim on it two or three weeks in.