No fault claim - Insurance company withholding premium
Discussion
Back in October my daughter was involved in an accident on the M25 in which a Tesla hit her from behind and wrote her car off. The other driver and his insurance company have admitted full liability, and my daughters insurance company paid out a settlement for the car. So far so good.
Her insurance company put her policy on hold from the date of the accident whilst the claim was sorted out and advised that since she's had the settlement she can get insured on another car using the same policy. However in trying to do so, it seems they won't actually insure her on anything as she's now deemed too high a risk!
So we have asked to close the policy and have a refund of the remainder of the policy (she'd only been insured with them for 7 weeks), so that she can try to get insurance elsewhere, but her insurance company has refused to refund anything at this point as it seems the claim is still open since they are still trying to recover money from the 3rd party insurer. We are now 3 months down the line, still the claim remains open, and we are unable to get my daughter insured on anything (she's 17, now having to get public transport to work, and paid best part of 2.5k for that insurance policy so doesn't have those kind of funds to get insured elsewhere).
Are insurance companies allowed to hold people's money like this? The issue is between the insurance companies, not the policy holder. No idea why the other insurance company isn't paying up, considering they've admitted full liability, but surely that isn't my daughters problem right?
Her insurance company put her policy on hold from the date of the accident whilst the claim was sorted out and advised that since she's had the settlement she can get insured on another car using the same policy. However in trying to do so, it seems they won't actually insure her on anything as she's now deemed too high a risk!
So we have asked to close the policy and have a refund of the remainder of the policy (she'd only been insured with them for 7 weeks), so that she can try to get insurance elsewhere, but her insurance company has refused to refund anything at this point as it seems the claim is still open since they are still trying to recover money from the 3rd party insurer. We are now 3 months down the line, still the claim remains open, and we are unable to get my daughter insured on anything (she's 17, now having to get public transport to work, and paid best part of 2.5k for that insurance policy so doesn't have those kind of funds to get insured elsewhere).
Are insurance companies allowed to hold people's money like this? The issue is between the insurance companies, not the policy holder. No idea why the other insurance company isn't paying up, considering they've admitted full liability, but surely that isn't my daughters problem right?
Just to fully understand ,has the Insurer declined to quote on any car or issued quotes that seem very expensive ?
The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
alscar said:
Just to fully understand ,has the Insurer declined to quote on any car or issued quotes that seem very expensive ?
The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
Admiral didn't give me the option of continuing the policy. But that might be because of the timing (the accident was a week before renewal, so what they actually did was refund the payment I'd made for the following year).The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
alscar said:
Just to fully understand ,has the Insurer declined to quote on any car or issued quotes that seem very expensive ?
The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
They declined to quote saying she was too high a risk. Her previous car (Fiat 500) was a group 8 car, we tried to get quoted on group 1 and 2 cars but no luck. The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
The insurer hasn't cancelled the insurance, they put it on hold giving her the option to either use the same policy for a different car, or we can cancel and seek a pro-rata'd refund. In asking for cancellation they won't refund any premium as they say the claim is still open. Conversations with the insurers led me to believe that until the claim is closed at their end, the accident won't yet be listed as non-fault so assume that might be why they won't insure her on anything. We're in a bit of a catch22 with this.
(I will go back and re-read the T&Cs again, just to be sure I'm correct on the cancellation policy, but I'm sure that's what it said). I also assumed that as it was a no-fault claim then we wouldn't lose the policy and all monies would be recovered from the 3rd party insurer. Never had to claim for anything before so I could be completely wrong of course.)
Edited by Joyrider1 on Thursday 2nd January 13:44
Joyrider1 said:
alscar said:
Just to fully understand ,has the Insurer declined to quote on any car or issued quotes that seem very expensive ?
The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
The insurer hasn't cancelled the insurance, they put it on hold giving her the option to either use the same policy for a different car, or we can cancel and seek a pro-rata'd refund. We tried getting them to insure her on another car but they refused to insure her on it saying she was too high a risk, so in asking for cancellation they won't refund any premium as the claim is still open. Conversations with the insurers led me to believe that until the claim is closed at their end, the accident won't yet be listed as non-fault so assume that might be why they won't insure her on anything. We're in a bit of a catch22 with this. Her previous car (Fiat 500) was a group 8 car, we tried to get quoted on group 1 and 2 cars but no luck. The Insurer has paid out in effect a total loss and therefore no premium is due back as the policy is now deemed fully earned.
This is standard practice and I would guess also in the t and c.
Some , not all Insurers ,also automatically cancel the policy after a total hence my first question - again this may well be contained within the t and c.
Others ( I believe the likes of Admiral for instance ) do offer to continue with the same policy for a different car.
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
The subrogation and hence claim is open until they recover their payout from the other Insurer but it would seem very unfair on your Daughter to say they will not reinstate her policy until the subrogation payment is actually received.
This is the the part I don’t understand though - if the Insurer has said they will continue with a policy for another car and then someone else there says no they won’t , they both cannot be correct !
If they get subrogation and cover 100% of their temporary payout to your Daughter then yes technically her account is loss free in terms of payment but then they will look at the accident in terms of knowing what to rate her new car as.
I think my advice would be to go back to the Insurer ( perhaps via their complaints dept ?) and politely stress that you are now in as you say a catch 22 situation and all you want to do is secure Insurance for your daughters car as an existing client accepting that her loss record is potentially slightly now blemished.
Perhaps stress the treating customers fairly mantra ( TCF ) - it isn’t used much as a saying now as has been replaced I believe but you’d be surprised at how effective using it may be.
Obviously the Insurer hasn’t done well out of having your daughter as a client but that shouldn’t be used against her !
davek_964 said:
Admiral didn't give me the option of continuing the policy. But that might be because of the timing (the accident was a week before renewal, so what they actually did was refund the payment I'd made for the following year).
I used Admiral as an example as a friend experienced just that but as you say in your case the timing may have made the difference although if I’m honest that would seem a little odd especially as they had already taken your next years premium.Maybe also the type of car and quantum of loss.
( My friends was a Maclaren and quite a large claim so perhaps they wanted a chance to get some money back ?!)
alscar said:
I think my advice would be to go back to the Insurer ( perhaps via their complaints dept ?) and politely stress that you are now in as you say a catch 22 situation and all you want to do is secure Insurance for your daughters car as an existing client accepting that her loss record is potentially slightly now blemished.
Perhaps stress the treating customers fairly mantra ( TCF ) - it isn’t used much as a saying now as has been replaced I believe but you’d be surprised at how effective using it may be.
Obviously the Insurer hasn’t done well out of having your daughter as a client but that shouldn’t be used against her !
Thanks, and you're right, next step is via complaints - When we spoke to them this morning, we raised the complaint, and now have a 3 day wait while they process it. Will see what they come back with, but not holding out much hope. I'd be quite happy just continuing with another car on the policy, just want to get her back on the road, but if they won't insure her on anything then I don't see any point in them keeping the policy open.Perhaps stress the treating customers fairly mantra ( TCF ) - it isn’t used much as a saying now as has been replaced I believe but you’d be surprised at how effective using it may be.
Obviously the Insurer hasn’t done well out of having your daughter as a client but that shouldn’t be used against her !
alscar said:
davek_964 said:
Admiral didn't give me the option of continuing the policy. But that might be because of the timing (the accident was a week before renewal, so what they actually did was refund the payment I'd made for the following year).
I used Admiral as an example as a friend experienced just that but as you say in your case the timing may have made the difference although if I’m honest that would seem a little odd especially as they had already taken your next years premium.Maybe also the type of car and quantum of loss.
( My friends was a Maclaren and quite a large claim so perhaps they wanted a chance to get some money back ?!)
It might suggest that us McLaren owners need some driving lessons though!
Joyrider1 said:
So we have asked to close the policy and have a refund of the remainder of the policy (she'd only been insured with them for 7 weeks), so that she can try to get insurance elsewhere, but her insurance company has refused to refund anything at this point as it seems the claim is still open since they are still trying to recover money from the 3rd party insurer.
Yes, the insurance co are quite right. Until they've recovered their outlay from the tp insurers, it's effectively a fault claim, and you don't get a refund if you cancel your policy after your insurers have paid a fault claim. When they get their outlay back, it'll then be non fault and you'll get your balance of premium back. alscar said:
The Insurer will indeed be seeking subrogation from the other Insurer but as above any delay in such is academic to your situation as no premium is due back.
that may well be the case for a total loss as a fault claim this is a no fault claim where her insurers are fully expecting to recover their losses and the OP to also recover their excess and any other unisured losses, as such the insurance would normally expect to continue cover as normal until renewalmartinbiz said:
that may well be the case for a total loss as a fault claim this is a no fault claim where her insurers are fully expecting to recover their losses and the OP to also recover their excess and any other unisured losses, as such the insurance would normally expect to continue cover as normal until renewal
Indeed except as the OP has said the Insurer isn’t actually “ allowing “ this.His daughter cannot purchase a car to also allow said policy to continue ( even assuming they will quote ) given the £ issue.
Edited by alscar on Thursday 2nd January 15:14
TwigtheWonderkid said:
Yes, the insurance co are quite right. Until they've recovered their outlay from the tp insurers, it's effectively a fault claim, and you don't get a refund if you cancel your policy after your insurers have paid a fault claim. When they get their outlay back, it'll then be non fault and you'll get your balance of premium back.
I certainly hope this is the case!TwigtheWonderkid said:
Yes, the insurance co are quite right. Until they've recovered their outlay from the tp insurers, it's effectively a fault claim, and you don't get a refund if you cancel your policy after your insurers have paid a fault claim. When they get their outlay back, it'll then be non fault and you'll get your balance of premium back.
I realise no such thing as average but how long does the subrogation process take ( assuming all things equal ) on this type of straightforward motor claim ?alscar said:
martinbiz said:
that may well be the case for a total loss as a fault claim this is a no fault claim where her insurers are fully expecting to recover their losses and the OP to also recover their excess and any other unisured losses, as such the insurance would normally expect to continue cover as normal until renewal
Indeed except as the OP has said the Insurer isn’t actually “ allowing “ this.His daughter cannot purchase a car to also allow said policy to continue ( even assuming they will quote ) given the £ issue.
Selfishly, I can now sleep at night knowing she's not out on her own driving, but it's frustrating for her as through no fault of her own she's been stopped from driving for 3 months so far with no hope at the moment of getting back on the road.
Joyrider1 said:
They declined to quote saying she was too high a risk. Her previous car (Fiat 500) was a group 8 car, we tried to get quoted on group 1 and 2 cars but no luck.
It might be worth trying a broader range of cars. Despite the name "Insurance groups" have little to do with insurance prices and insurers don't actually use them to rank models by risk. Some people have reported getting surprisingly cheap premiums on large cars from a high insurance group but which scream "I'm not a boy racer!" - think an old Volvo estate or similar. But it may also be that they just have a blanket policy of not insuring 17 year old with fault claims, in which case trying a different car isn't going to help.
So to summarise:
Daughter is required by law to have insurance. This £2.5k policy should put her back in the position she was in.
Due to no fault of her own, she has effectively been without the means to insure a car for a quarter of the policy year.
Her insurance company will just blame the other company, who she has no contract with and so can't raise a complaint against. The complaint with her company will be a fobbing off, and even if raised to ombudsman level it's unlikely (to me) a body funded by the insurance industry will want to criticise what seems to be acceptable to insurance companies as "standard practice".
So 1/4 * £2.5k = £625 of policy up in smoke because 2 insurance companies can't process their bread and butter work.
At the same time I heavily suspect her insurance company is doing exactly the same to third parties claiming against itself.
This is all part of the "heads we win, tails you lose" attitude of insurance company sector.
For instance, would an insurance company wait on you for 3 months whilst you got round to paying them? I think not. Your policy would be cancelled quicker than you can say 6 points on your licence.
I don't know what the answer is but maybe raising it with a complaints column or social media? The insurance sector are like wheelbarrows, so your daughter needs a reason for her case to be pushed ever so slightly faster than the others, and that involves her company picking up the phone and putting pressure on the third party company.
Daughter is required by law to have insurance. This £2.5k policy should put her back in the position she was in.
Due to no fault of her own, she has effectively been without the means to insure a car for a quarter of the policy year.
Her insurance company will just blame the other company, who she has no contract with and so can't raise a complaint against. The complaint with her company will be a fobbing off, and even if raised to ombudsman level it's unlikely (to me) a body funded by the insurance industry will want to criticise what seems to be acceptable to insurance companies as "standard practice".
So 1/4 * £2.5k = £625 of policy up in smoke because 2 insurance companies can't process their bread and butter work.
At the same time I heavily suspect her insurance company is doing exactly the same to third parties claiming against itself.
This is all part of the "heads we win, tails you lose" attitude of insurance company sector.
For instance, would an insurance company wait on you for 3 months whilst you got round to paying them? I think not. Your policy would be cancelled quicker than you can say 6 points on your licence.
I don't know what the answer is but maybe raising it with a complaints column or social media? The insurance sector are like wheelbarrows, so your daughter needs a reason for her case to be pushed ever so slightly faster than the others, and that involves her company picking up the phone and putting pressure on the third party company.
Ian Geary said:
So to summarise:
Daughter is required by law to have insurance. This £2.5k policy should put her back in the position she was in.
Due to no fault of her own, she has effectively been without the means to insure a car for a quarter of the policy year.
....
I don't know what the answer is but maybe raising it with a complaints column or social media? The insurance sector are like wheelbarrows, so your daughter needs a reason for her case to be pushed ever so slightly faster than the others, and that involves her company picking up the phone and putting pressure on the third party company.
Yep, pretty much that. Am currently playing it (fairly) nicely with them, albeit putting on more pressure to get it resolved. Have a complaint raised, for which they have a couple of days to respond, and will be putting in a complaint with ombudsman shortly. Yesterday they tried to give us £300 goodwill when we raised the complaint, but there was an undertone that if we accept it then that's the matter closed. So we refused it. Not gonna let this go and will keep pushing. I get that they are trying to recover their money, but my daughter shouldn't be penalised in the process when it's completely out of her control. It seems to me that insurance companies can just do whatever the fDaughter is required by law to have insurance. This £2.5k policy should put her back in the position she was in.
Due to no fault of her own, she has effectively been without the means to insure a car for a quarter of the policy year.
....
I don't know what the answer is but maybe raising it with a complaints column or social media? The insurance sector are like wheelbarrows, so your daughter needs a reason for her case to be pushed ever so slightly faster than the others, and that involves her company picking up the phone and putting pressure on the third party company.
k they like, and treating customers fairly is a load of old tosh. Joyrider1 said:
Yep, pretty much that. Am currently playing it (fairly) nicely with them, albeit putting on more pressure to get it resolved. Have a complaint raised, for which they have a couple of days to respond, and will be putting in a complaint with ombudsman shortly. Yesterday they tried to give us £300 goodwill when we raised the complaint, but there was an undertone that if we accept it then that's the matter closed. So we refused it. Not gonna let this go and will keep pushing. I get that they are trying to recover their money, but my daughter shouldn't be penalised in the process when it's completely out of her control. It seems to me that insurance companies can just do whatever the fk they like, and treating customers fairly is a load of old tosh.
Sounds like progress although I guess ideally what you really want is simply for them to agree to offer cover on your Daughters new car.k they like, and treating customers fairly is a load of old tosh. Yes accepting the £300 would indeed close the matter but wouldn't stop you then still going to the ombudsman within a 6 months period -not that you necessarily want to do that given the ombudsman would delay matters still further !
You also cannot go to the ombudsman now until the Insurer has closed its complaints service though.
There is one other option open to you should the complaints dept not agree with you and that's to email their CEO directly.
Again politely and ask for them to refer to their own Executive team to look into this etc.
TCF is certainly not a load of old tosh and as I said yesterday people that work in the Financial Services do not like it being mentioned !
Edited to add it MAY be worth when you email the CEO ( if that's what you decide ) to also cc their Complaints dept just to ensure that they are completely joined up internally.
Offering you a goodwill payment in advance of going to their complaints dept isn't necessarily the best action for them !
Edited by alscar on Friday 3rd January 12:26
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