Insurance Co claiming monies for exceeding limited mileage?
Discussion
Hi all,
I've a feeling that I'm about to get schooled... but I thought I would ask the wise and knowledgeable PH forumites for advice on a situation.
Summary:
- Insured under a Limited Mileage policy
- unexpectedly land new job
- commute increases substantially but 'Working From Home' on an ad hoc basis means it is difficult to predict likely yearly mileage
- stated mileage ultimately exceeded by c.90 - 120%
- insurance company now claiming they are owed monies to cover the additional mileage, even though the period of insurance has passed and no claims were made.
I have been told that the additional monies requested are payable, and if they are not paid, demand letters/invoices would be sent, this year's policy (which would have a higher mileage) would be cancelled, and ultimately Debt Collectors would be instructed.
I appreciate and understand that insurers operate a risk assessment-based pricing system, and an expected increase in mileage must equal some level of increased risk and therefore increased premium, but can they retrospectively adjust a yearly premium and demand monies some time after the event, even when they have not experienced any financial impacts?
I'm happy (sort of
) to be told my understanding is wrong, I just want to make sure that I am not paying unnecessarily due to scaremongering.
Many thanks in advance, fellow PHers.
I've a feeling that I'm about to get schooled... but I thought I would ask the wise and knowledgeable PH forumites for advice on a situation.
Summary:
- Insured under a Limited Mileage policy
- unexpectedly land new job
- commute increases substantially but 'Working From Home' on an ad hoc basis means it is difficult to predict likely yearly mileage
- stated mileage ultimately exceeded by c.90 - 120%
- insurance company now claiming they are owed monies to cover the additional mileage, even though the period of insurance has passed and no claims were made.
I have been told that the additional monies requested are payable, and if they are not paid, demand letters/invoices would be sent, this year's policy (which would have a higher mileage) would be cancelled, and ultimately Debt Collectors would be instructed.
I appreciate and understand that insurers operate a risk assessment-based pricing system, and an expected increase in mileage must equal some level of increased risk and therefore increased premium, but can they retrospectively adjust a yearly premium and demand monies some time after the event, even when they have not experienced any financial impacts?
I'm happy (sort of
) to be told my understanding is wrong, I just want to make sure that I am not paying unnecessarily due to scaremongering.Many thanks in advance, fellow PHers.
RSTurboPaul said:
Hi all,
I appreciate and understand that insurers operate a risk assessment-based pricing system, and an expected increase in mileage must equal some level of increased risk and therefore increased premium, but can they retrospectively adjust a yearly premium and demand monies some time after the event, even when they have not experienced any financial impacts?
Yes. They have experienced a financial impact. You paid less into the pot than you should have done. I appreciate and understand that insurers operate a risk assessment-based pricing system, and an expected increase in mileage must equal some level of increased risk and therefore increased premium, but can they retrospectively adjust a yearly premium and demand monies some time after the event, even when they have not experienced any financial impacts?
Did you speak with the ins co when you took out the policy / when your circumstances changed?
I have most of my cars on a limited mileage policy and every time I've asked them about predicting the limited mileage, their advice has been that if you get close to the limit and it looks like you are going to go over it, then you should phone them up and adjust it (with a bump to the premium).
If you think about their end of the deal, more miles on the road = increased risk so it is perfectly reasonable for them to require more money to cover the increased risk.
In my case, I haven't yet gone over the limit on any of my cars, but I have switched which car I take to work for a month or two to ensure this is the case. If I was about to go over, I would definitely be phoning them to make sure I was actually covered in the event of an accident.
Think yourself lucky, if you had crashed first and then found out you had gone over the limit, you'd be on here with a much unhappier scenario.
I have most of my cars on a limited mileage policy and every time I've asked them about predicting the limited mileage, their advice has been that if you get close to the limit and it looks like you are going to go over it, then you should phone them up and adjust it (with a bump to the premium).
If you think about their end of the deal, more miles on the road = increased risk so it is perfectly reasonable for them to require more money to cover the increased risk.
In my case, I haven't yet gone over the limit on any of my cars, but I have switched which car I take to work for a month or two to ensure this is the case. If I was about to go over, I would definitely be phoning them to make sure I was actually covered in the event of an accident.
Think yourself lucky, if you had crashed first and then found out you had gone over the limit, you'd be on here with a much unhappier scenario.
They quoted you based on the information you provided for the year.
You paid them based on the quote and the information you provided.
Your information for the year has changed.
They can now charge you extra for the different information you have provided.
The sucker is when they do this they will often say there is also a £20-30 admin fee to alter the documents which I think is just a little harsh.
You paid them based on the quote and the information you provided.
Your information for the year has changed.
They can now charge you extra for the different information you have provided.
The sucker is when they do this they will often say there is also a £20-30 admin fee to alter the documents which I think is just a little harsh.
Yes, you are in breach of the contract. I guess they could sue for that breach. I am sure they are acting in line with ABI guidelines. As others have said, lucky you did not have cause to claim. Why did you not call them when you were becoming aware you would be exceeding the annual mileage?
Camaro said:
They quoted you based on the information you provided for the year.
You paid them based on the quote and the information you provided.
Your information for the year has changed.
They can now charge you extra for the different information you have provided.
The sucker is when they do this they will often say there is also a £20-30 admin fee to alter the documents which I think is just a little harsh.
NFU do not charge admin fees. I found myself in a similar situation, and advised them of my likely increase in mileage, I popped into the local office (yes an office!), new sheet adjusted and printed, no admin charge, and no extra cost on the premium (I guess I was still in the same price-band of risk).You paid them based on the quote and the information you provided.
Your information for the year has changed.
They can now charge you extra for the different information you have provided.
The sucker is when they do this they will often say there is also a £20-30 admin fee to alter the documents which I think is just a little harsh.
Thanks for the quick replies, all.
When I queried whether I would have to pay said increased excess if a Third Party claimed off the insurance (as Third Party claims don't usually have any excess to pay, do they?) I was told that they would likely seek to reclaim it off me.
I have had nothing in writing at this point in time with regards to the claims being made, it has been verbally relayed to me only.
CoolHands said:
I always thought any excess mileage was at 3rd party cover only ie they can’t force the excess at fully comp?
There is a condition within the insurance contract that says there is an increased excess to pay on a claim if one exceeds the Limited Mileage allowance.When I queried whether I would have to pay said increased excess if a Third Party claimed off the insurance (as Third Party claims don't usually have any excess to pay, do they?) I was told that they would likely seek to reclaim it off me.
Lindun said:
A limited mileage policy on a vehicle that you commute in? Do these policies exist?
Can you post a redacted copy of the correspondence you’ve received to support what you’re claiming?
I was of the understanding that any policy can be a Limited Mileage policy - presumably in that lower mileages than 'the average' could be seen as a Limited Mileage policy?Can you post a redacted copy of the correspondence you’ve received to support what you’re claiming?
I have had nothing in writing at this point in time with regards to the claims being made, it has been verbally relayed to me only.
InitialDave said:
Out of interest, how do they know you've gone over the mileage limit?
I was wondering that as well! At renewal I'm always asked to confirm my estimated annual mileage for the coming year (for which I'm about to pay the premium) but I've never been asked to confirm how many miles I've done in the insurance year that's just finished. I suppose if at renewal they ask for the total mileage on the car - which arguably affects its value in the event of a potential write-off - they can compare that to the previous year and they'll see the annual mileage has been higher than estimated. However, at renewal I don't think my insurance company asks for the total mileage on the car, they just ask me to confirm my expected annual mileage for the coming year (or to be more accurate, they ask me to tell them if the current estimate they're using to calculate the premium needs changing).
Just seen the comment about using the MOT database but not convinced about that - for a start, how that would work with relatively new cars that don't require an MOT?!
RSTurboPaul said:
MOT database.
(Presumably if one had an old car with a mileometer that was prone to breaking regularly, one's MOT certificates would reflect the lower mileage captured.)
Unless the period between MOTs is exactly the same as your insurance period, that's stretching it a bit, isn't it? While it's not that common to do a low mileage most of the time then pile on a load of miles in a short period, it does happen, so how good is their data?(Presumably if one had an old car with a mileometer that was prone to breaking regularly, one's MOT certificates would reflect the lower mileage captured.)
How can they be sure you were driving the car all that time? I've done quite a bit of driving in other people's cars, and the mileage I'm putting on shouldn't count toward their mileage limit, but it'll still clock up on the odo.
If you've been insured on the basis of X miles a year and you've done Y miles a year, so they want to charge you the premium that would apply for Y miles, that itself seems fair enough... but if this is in the form of a snotty letter with a "we've decided you've done this, cough up" attitude, I can't say I'd be overly impressed.
RSTurboPaul said:
I was of the understanding that any policy can be a Limited Mileage policy - presumably in that lower mileages than 'the average' could be seen as a Limited Mileage policy?
I have had nothing in writing at this point in time with regards to the claims being made, it has been verbally relayed to me only.
Not really. Most are estimated mileage and rarely if ever checked. Limited mileage are very much for specialist policies. I have had nothing in writing at this point in time with regards to the claims being made, it has been verbally relayed to me only.
I’m sorry but you’re now saying you’ve had a phone call after the policy has expired based on the insurance company checking the MOT database and that the dates coincide perfectly with your policy year.
Hmmmmmm
I think you asked for a renewal quote and then told them the current mileage and they put 2 and 2 together.
You've done double the mileage you paid for in layman's terms and now they know, they quite rightly would like their monies. A 3rd party claim may still come to light even after your policy has expired.
You've done double the mileage you paid for in layman's terms and now they know, they quite rightly would like their monies. A 3rd party claim may still come to light even after your policy has expired.
I have a limited mileage policy on my MX5 and was told in no uncertain terms that my policy would be void if I exceeded them, at the time I took the policy out I had to tell the insurer exactly what mileage was on the car.
On a conventional 'estimated' based policy it would be very difficult to control, especially if as posted above your MOT and insurance date don't align exactly. The insurance company could not prove that you didn't for example do a 5,000 mile trip one week before the MOT that brings the average up for the whole year.
On a conventional 'estimated' based policy it would be very difficult to control, especially if as posted above your MOT and insurance date don't align exactly. The insurance company could not prove that you didn't for example do a 5,000 mile trip one week before the MOT that brings the average up for the whole year.
The MOT mileages they are referencing cover the past three MOTs (i.e. looking at mileages covered at the two MOTs after the first MOT being considered, with the forthcoming MOT to confirm mileage travel over this third year).
They are therefore demanding an additional payment to cover the additional mileage travelled within those two years they can see on the MOT database, and I guess they may also ask for even more money when they get the MOT mileage for this year. (Not that I've gone far this year, seeing as it's been in bits for several months.)
The MOT dates do not accord with the Insurance renewal dates, but the recorded figures do show that the Limited Mileage quoted for has been exceeded.
The company provided a renewal quote automatically, but it was not until I rang up that additional comments on the file requesting additional payments were noticed.
There is nothing specific in the paperwork from the previous year that covers Limited Mileage or retrospectively applied premiums, and I can see nothing specific on the insurance company website.
It does have wording along the lines of 'This list of potential changes you must tell us about is not exhaustive, and if you don't tell us about something that might affect your cover, we might reject a claim, reduce a payout, cancel your policy or treat it as though it never existed, or a combination of the above', which sounds like the sort of 'catch-all' wording that could be used to bash customers over the head with!
I'd rather not have a cancelled policy and all that entails, and I'd also rather not have debt collectors and credit file issues, but without a clearly defined set of regulations regarding this particular situation (or not one that I can find) I feel like I have no option but to cough up the money to make my life easier, whether or not I am legally bound to do so. (Not that payment would guarantee anything, of course, if someone at the insurers wants to add some sort of note on my file that might make my life difficult??)
They are therefore demanding an additional payment to cover the additional mileage travelled within those two years they can see on the MOT database, and I guess they may also ask for even more money when they get the MOT mileage for this year. (Not that I've gone far this year, seeing as it's been in bits for several months.)
The MOT dates do not accord with the Insurance renewal dates, but the recorded figures do show that the Limited Mileage quoted for has been exceeded.
The company provided a renewal quote automatically, but it was not until I rang up that additional comments on the file requesting additional payments were noticed.
There is nothing specific in the paperwork from the previous year that covers Limited Mileage or retrospectively applied premiums, and I can see nothing specific on the insurance company website.
It does have wording along the lines of 'This list of potential changes you must tell us about is not exhaustive, and if you don't tell us about something that might affect your cover, we might reject a claim, reduce a payout, cancel your policy or treat it as though it never existed, or a combination of the above', which sounds like the sort of 'catch-all' wording that could be used to bash customers over the head with!
I'd rather not have a cancelled policy and all that entails, and I'd also rather not have debt collectors and credit file issues, but without a clearly defined set of regulations regarding this particular situation (or not one that I can find) I feel like I have no option but to cough up the money to make my life easier, whether or not I am legally bound to do so. (Not that payment would guarantee anything, of course, if someone at the insurers wants to add some sort of note on my file that might make my life difficult??)
Maybe go on a comparison and get a number of quotes at different annual mileages.
This will give you an idea of the % premium uplift additional miles may cost you.
If your company then starts ripping the arse out of it with massive hikes, you have a some ammo with which to push back a bit.
This will give you an idea of the % premium uplift additional miles may cost you.
If your company then starts ripping the arse out of it with massive hikes, you have a some ammo with which to push back a bit.
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