32 replies to this topic

[yorkshirechris]

My Mini was stolen in early March... I've not long ago recieved a settlement from the insurer and accepted it so as far as I'm concerned the matter is closed. However, I've just noticed that I'm still paying a monthly Direct Debit for the insurance policy.

I called up the insurer, Lancaster Insurance, who said that I still have to pay for the whole year's insurance!!

Is this right?

I made the point that I have nothing to insure anymore, so why on earth should I be paying for a whole year's cover when the vehicle was stolen after 1 month?

I ended up hanging up on the stupid *woman of ill repute* because she kept talking over me which I can't STAND. She also had the cheek to say if I get another vehicle I could modify the policy and keep it with them!!

Where do I stand?

[WiredbyWilson]

Normally they take the balance out of your settlement cheque

I do believe that this is normal that you have to pay the full years premium prior to receiving a payout.

[northy]

Because mate you take up the finance to pay monthly from an outside finance company, who pay the insurance providers when you take out the policy.
You can usually cancel the insurance and get a pro-rata refund and then pay back the finance comapny.

[yorkshirechris]

Nothing was taken out of the settlement regarding the policy premium. They've told me I've got to keep paying the insurance premium until the 12 months is up...

[Ethel]

They are right, though taking a bit of a liberty. You have a contract for the duration of the policy, one year. You would still be insured to drive someone else's car. It would have been fair if they had contacted you to explain your options since they know you no longer have the Mini. You may be able to suspend the cover, or cancel it, but there's usually a hefty surcharge if you cancel so you might not save much of the yearly premium. If you're getting another car see if you can suspend cover to transfer to the new wheels.

Because mate you take up the finance to pay monthly from an outside finance company, who pay the insurance providers when you take out the policy.
You can usually cancel the insurance and get a pro-rata refund and then pay back the finance comapny.

[yorkshirechris]

Just spoke to them again...

"You can cancel it but you will be liable for the whole premium of the policy because you've used the policy to make a claim"

"Right I see, so it's a different situation than if I were to cancel it in any other circumstance"

"Well no"

"Well, it is, because if I were to cancel if I sold the vehicle for example, I'd just pay for the cover I'd used plus a £12 admin fee, but the fact I've made a claim means you have a strop on with me and are trying to get as much of that money back from me as you can"

"Well it does state in your policy"

"Yeah I know you keep quoting the book to me but this is why Insurance companies have such a bad name, at the end of the day I've used one month of the policy so should not have to pay for 12 months cover

"If you plan to get another car you can transfer the policy to that if you like"

"No, after the fiasco of getting the settlement and now this, I'll never be using yourselves again, but thanks for your time"

What a set of *melonsing* *melons*, I didn't think I'd still be having to deal with them!

[Timtom]

I think its logical, You claimed inside your 1 year of policy. Otherwise you could just keep cancelling after you made a claim and get your money back and thus pay very little a year even though you may be a rubbish driver or have your car nicked often (the examples are not aimed at you personally in anyway but i'm just trying to make a point!)

Thanks,

Timmy

[cambiker71]

It's completely normal and in the terms and conditions of your policy (the one we all never read, me included), you paid for an insurance policy which is for a year, they offered to let you pay for it in installments but you still owe them the money for the policy, If you'd paid in full at the start then that would be the same you'd not be getting a refund. You entered into a finance agreement to buy a 12 month policy, not a month by month policy although these are available if you search.
If the car had been on finance and you'd only paid one month of the agreement do you think they would let you off the subsequent payments? It's as good as the same just a different sort of goods, the offer to transfer it is a goodwill one which seems reasonable to me.
I'd be more worried about the next premium you have to pay with a total loss claim on your record, now that's when they'll pull your pants down for payment.

[Ethel]

Omly they assess the risk beforehand and base the premium on that. I agree with chris that he should be entitled to something back as they will avoid 11months liability if he cancelled. They admit there's still value in the policy if it can be transferred to another car. If it's in the contract you may be flogging a dead horse but you could always take it up with the ombudsman or FSA. They might be persauded to make a good will gesture to get you off their backs

I think its logical, You claimed inside your 1 year of policy. Otherwise you could just keep cancelling after you made a claim and get your money back and thus pay very little a year even though you may be a rubbish driver or have your car nicked often (the examples are not aimed at you personally in anyway but i'm just trying to make a point!)

Thanks,

Timmy

[yorkshirechris]

My point though is that I paid for 12 months insurance cover - I've only had one months cover and had to claim through to fault of my own!

So the way I see it is that I am now paying £31 a month to cover a car that is no longer in my possession. Even worse, the scum who took it may potentially be paying insurance on that vehicle with a different identity.

If I cancelled the policy after a month because I sold the car, I would only have to pay that one month's worth of cover, plus a small admin fee.

I'm having to cancel it after a month because it's been stolen, so in my eyes they're just trying to get as much of that settlement money back off me as they can.

Any ideas where I'd end up if I just cancelled my direct debit and refused to pay for it? I'm getting nothing for that money!

[cambiker71]

I'm having to cancel it after a month because it's been stolen, so in my eyes they're just trying to get as much of that settlement money back off me as they can.

That's the reason!!

The premium they charged you is obviously far less than you got paid out for the car, it's not only you that has lost out! Sorry but this is the way of the world with insurance companies which is why i have always fought them for the best pay out possible if the worst has happened and make sure all expenses are covered.
The reason is still as i mentioned in my last post you chose to pay by installments for a policy that would last for a year or until there is a claim.

I'd love to agree with you and hope you get somewhere with this, but it is exactly what the insurance terms will tell you if you have a look in the little book (or terms and conditions section of the email) they send you with the policy.

P.S. Don't do the cancelling the direct debit thing, that could end up with you being uninsurable or never being offered the pay by installments option again, the insurance companies all share info these days so be careful.

Edited by cambiker71, 17 May 2010 - 05:22 PM.

[yorkshirechris]

I cant find anything in the terms and conditions after a quick skim-read.

"The reason is still as i mentioned in my last post you chose to pay by installments for a policy that would last for a year or until there is a claim."

I'd still be saying the same as I am now if I'd have paid upfront because I'd be expecting 11 months back - I've got nothing being covered for 11 months but am paying cover!

[stevede]

Whilst it doesn't help you I think you will find this is quite normal and as said before, in the small print. (usually along the lines of cancellation subject to being no claim etc)

You entered into a contract where you agreed to pay them a sum of money and they agreed to insure your car and pay out in the event of a claim.

The company it would seem have kept their side of the deal, they are now requiring you to do the same. In effect, you have received in full the benefit of a service that you have not yet paid for in full. Some companies will even cancel a policy after a total loss claim.

The same logic applies to house insurance where someone insures their contents for say £20k but in reality they have £40k worth of goods. In the event of a theft or fire, who's goods were lost? The £20k that was insured or the £20k that wasn't? You can see the dilema.

As said at the begging this doesn't help your case for events outside of your control but may help explain some of the thinking.

Just for the record, I have no connection with the insurance industry

Regards

Steve

[yorkshirechris]

In effect, you have received in full the benefit of a service that you have not yet paid for in full.

Well not strictly, I've paid for the duration of cover between the start of the policy and the time the vehicle was stolen.... after that point I no longer have a vehicle to cover, so shouldn't keep paying for it for another 11 months!

I can see how it's a normal state of affairs and that my insurer have acted within the terms & conditions of my policy and the law but that still doesn't make it morally right!

[cambiker71]

I cant find anything in the terms and conditions after a quick skim-read.

"The reason is still as i mentioned in my last post you chose to pay by installments for a policy that would last for a year or until there is a claim."

I'd still be saying the same as I am now if I'd have paid upfront because I'd be expecting 11 months back - I've got nothing being covered for 11 months but am paying cover!

You're now paying for previous cover unfortunately, somewhere it will be in the small print that the full premium will need to be paid in the event of a claim.
Or have you used Adrian Flux or similar who set the installments with Premium credit? If so then your insurance company will already have had their money from Premium credit and the contract is between you and PC for the payment of the policy that they bought you and now charge you a monthly premium for, very similarly to paying the full premium on a credit card, but at a higher rate!