Am I in the clear re: Insurance?

[Marumba]

On the first of June I crashed my Civic Type-R. It'd only been in my posession for 10k miles from new, picked up Xmas shortly after launch. Went round corner in 60mph limit to find someone going 20mph. Okay, couldve anticipated it but if we did that everywhere we'd never leave 1st gear. I wasnt speeding (50mph proven by Police) but in trying to avoid car ahead on bend tail went light and oversteered. Went across road and into another car on the other side. Nasty head on around 100mph. Broke right leg (dont most drivers when on the brake - that should be looked at safety wise next.) Everyone survived. My first accident in four years. Guess I drive differently now. Just goes to show accidents can happen when you least expect them (wasnt rushing anywhere.)

Was ultimately my fault and admit as much. Did so in court. Three points and £185 fine.

But Im going on too much...

Got a letter from the insurance company yesterday and it had a cheque in it for the chunk I owned (car was on finance, had only paid about 25% off at that point.) But letter said they'd cover the rest (15.5k car worth, I only bought it for 16k!)

My question is - Does this mean they've checked everything over and are paying out? I wouldnt have thought ANY insurance company would give you a cheque if they hadnt cleared everything would you?

[kevinday]

Sounds like you are OK to me.

[Mad Dave]

assumably you had 'gap' insurance - IIRC this is completely seperate from normal insurance - gap insurance pay the deficit between the amount you OWE and the amount youre paid out, ie if you buy a car for £10k, write it off and the insurance only see fit to give you £5k, gap insurance will pay the remaining £5k. Its a whole seperate claim form tho, and i THINK its all part of the finance deal. Get it sorted quick sharp - i didnt when in a similar situation and the finance company passed my file to a debt collection agency! (the car was the collateral on the loan, once it was gone they got scared and passed to debt colection even tho i hadnt defaulted on any payments) and as a result my credit record got shafted!

hope this helps!

[Marumba]

Actually I didnt take out the GAP cover! At the time I thought it was a waste :0

Someone had mentioned some insurers paying out the full amount if car is written off within 12 months? I'll get forms sent off tonight.

[joust]

Marumba said: Actually I didnt take out the GAP cover! At the time I thought it was a waste :0

Actually - it is a complete waste of money. Insurance is based on a principle of Indemnity, which means that policyholders are put in the same financial position after a loss as they were immediately before it. It's not your issue how the insurance company does that - it's theirs.

Consequently the advice given to me (by an actuary) is that GAP insurance is a "spin", as all you need to do is ask that the insurance company find you the same spec car, purchase it, and then assign it back to the finance company whereupon the payments continue.

It's meant to be a right faff - and not many people argue and so the companies get away with charging large amounts of money

Someone had mentioned some insurers paying out the full amount if car is written off within 12 months? I'll get forms sent off tonight.

Pretty much standard nowadays on comprehensive insurance (which you need for most new cars...) and so that's almost certainly what they are doing. Fill in the forms and take the money and go buy a new one with it!

J

[loaf]

Joust is right - indemnity means putting the proposer back in the same financial position as (s)he was before the loss occurred. In addition, the finance company had an insurable interest in the car - i.e. they stood to lose out if the car was written off. The insurance policy covers them automatically, and will pay them off direct. If you have had a cheque in full and final settlement, the contract between you is discharged and you and they have no further obligation to each other.