Obligation to honour ins. quote?
Discussion
I phoned up a major supermarket insurance company on Friday to get a quote on my first TVR - a Chimaera 4.0. With zero no claims, a fault claim on my insurance and being only 22 I thought it was going to be quite a hike but was willing to budget quite a lot for it.
Therefore I was delighted when they offered me £1115 for the remainder of my policy. On the basis of this, I gave the seller of my car of choice a deposit in order to secure it.
Then I got thinking that it might be better to keep my existing car, so I called up again to get a quote for a new policy. This time they say they won't quote anybody on a TVR under 23 and without 2 years no claims! I told him I had been given a quote on Friday which he flatly denied and made no attempt of an apology. He then went away for a long time to listen to the original call, then came back and said he wasn't going to listen to it as there was no point - they weren't going to insure me full stop.
I've logged an official complaint of which I'm awaiting the outcome - the question is, do I have a leg to stand on regarding my deposit? Surely an insurance company has to make good on its insurance quotes or everybody would be taking a huge leap of faith when forking out thousands for a car!?
Therefore I was delighted when they offered me £1115 for the remainder of my policy. On the basis of this, I gave the seller of my car of choice a deposit in order to secure it.
Then I got thinking that it might be better to keep my existing car, so I called up again to get a quote for a new policy. This time they say they won't quote anybody on a TVR under 23 and without 2 years no claims! I told him I had been given a quote on Friday which he flatly denied and made no attempt of an apology. He then went away for a long time to listen to the original call, then came back and said he wasn't going to listen to it as there was no point - they weren't going to insure me full stop.
I've logged an official complaint of which I'm awaiting the outcome - the question is, do I have a leg to stand on regarding my deposit? Surely an insurance company has to make good on its insurance quotes or everybody would be taking a huge leap of faith when forking out thousands for a car!?
As no money has passed hands (and therefore no contract formed) I don't belive they are obliged to stick to their quote.
Something simmilar happened a few years back with my MR2 Turbo, but I jumped at the quote I was given and gave card details over the phone. When certificae arrived it was for a UK car, despite me telling them it was a Turbo import. Rang them up to correct details and they said "sorry, don't insure imports". Spoke to supervisor and they pulled the tape recording of my quote and agreed that I had clearly stated it was an import and a turbo so let me have the policy.
Something simmilar happened a few years back with my MR2 Turbo, but I jumped at the quote I was given and gave card details over the phone. When certificae arrived it was for a UK car, despite me telling them it was a Turbo import. Rang them up to correct details and they said "sorry, don't insure imports". Spoke to supervisor and they pulled the tape recording of my quote and agreed that I had clearly stated it was an import and a turbo so let me have the policy.
kevinday said:
If you give them full and correct details over the phone and they give you a quote which you accept they have indeed entered into a contract with you, therefore they must honour it or be open to legal recourse for breaking the contract.
Sorry Kevin but I think that is not quite correct.
I am not a lawyer, but as far as I understand contract law, the quote that you received is considered to be an "invitation to trade" (or words to that effect).
When you say to them that you are willing to buy the policy, you are making the "offer" and when the insurance company accept your offer, you effectively have a contract.
I think that I am correct, but I am sure some real lawyers will be along soon to correct me if I am not. (and apologies to Kevin if I am wrong)
>> Edited by mandat on Monday 8th November 23:39
Would the principle in Hedley Byrne v Heller apply?
In a nutshell, that states that you have a duty of care if you make statements which cause a third party to suffer loss. Here's a link that explains it...
www.lawteacher.net/Tort/Statements%20Liability/Liability%20for%20Statements%20Lecture.htm
It seems to me that the 4 clauses of the "Special Relationship" are met here. You have committed to financial loss (deposit on new car) solely on the strength of false information that was negligently given to you.
I guess it all swings on whether you can get hold of the evidence of the original 'phone call.
(IANAL by the way - just came across this in a specific situation that affected me a while ago).
In a nutshell, that states that you have a duty of care if you make statements which cause a third party to suffer loss. Here's a link that explains it...
www.lawteacher.net/Tort/Statements%20Liability/Liability%20for%20Statements%20Lecture.htm
It seems to me that the 4 clauses of the "Special Relationship" are met here. You have committed to financial loss (deposit on new car) solely on the strength of false information that was negligently given to you.
I guess it all swings on whether you can get hold of the evidence of the original 'phone call.
(IANAL by the way - just came across this in a specific situation that affected me a while ago).
Thanks to everyone for their replies. Luckily it didn't come to a showdown with them - the company has just called me and said they will reimburse my deposit... result! 
So should I take that as an insurance company is obliged to honour an offered policy then? Imagine I'd parted with £20k for the car!
>> Edited by CrazyLegs on Tuesday 9th November 12:19
So should I take that as an insurance company is obliged to honour an offered policy then? Imagine I'd parted with £20k for the car!
>> Edited by CrazyLegs on Tuesday 9th November 12:19
CrazyLegs said:
So should I take that as an insurance company is obliged to honour an offered policy then?
Not necessarily. However they would potentially be obliged to reimburse you for a lost deposit on a prospective car purchase.
Mind you, for this to be reasonably watertight you'd have to have made it clear to them at the time they made the quote that this was your intention.
It actually makes a lot of sense when you think about it. If they give you a negligent insurance quote knowing full well that you will commit to financial outlay on the strength of it, then they ought to be responsible if they change their mind afterwards and leave you out on a limb.
Glad it worked out ok anyway.
>> Edited by BlackStuff on Tuesday 9th November 12:58
Tesco insured me on a 4.0 Chimaera when i was 21 just over a year ago with zero no claims so them tellin you that they dont insure anyone under 23 with less than 2 years no claims is boll**ks!
I have heard Liverpool Victoria are very good but dont know what there stance is on younger drivers?
I have heard Liverpool Victoria are very good but dont know what there stance is on younger drivers?
Mr2Mike said:
As no money has passed hands (and therefore no contract formed) I don't belive they are obliged to stick to their quote.
No requirement for money to change hands for a contract to be formed.
It depends on the words used in the call, if the insuree gives all the details and the insurer quotes a price, this is normally an offer that is open to acceptance by the insuree. The reason is that the offer is specifically to that individual insuree only. In effect the insuree is inviting the insurance company to treat when giving the car details. The acceptance is where the insuree accepts the quote (offer) given by the insurance company. It may, however, be 'subject to contract' i.e. completion of the paperwork. It is not clear cut, it very much depends on the actual words used. If 'subject to contract' is not used then the telephone deal is a contract.
kevinday said:
No requirement for money to change hands for a contract to be formed.
It depends on the words used in the call, if the insuree gives all the details and the insurer quotes a price, this is normally an offer that is open to acceptance by the insuree.
The reason is that the offer is specifically to that individual insuree only. In effect the insuree is inviting the insurance company to treat when giving the car details.
The acceptance is where the insuree accepts the quote (offer) given by the insurance company. It may, however, be 'subject to contract' i.e. completion of the paperwork. It is not clear cut, it very much depends on the actual words used. If 'subject to contract' is not used then the telephone deal is a contract.
I said:
I am not a lawyer, but as far as I understand contract law, the quote that you received is considered to be an "invitation to trade" (or words to that effect).
When you say to them that you are willing to buy the policy, you are making the "offer" and when the insurance company accept your offer, you effectively have a contract.
I'd be interested to find out who is right on this one
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