Insurance explanation

[WokingWedger]

Can any one explain please, why, when one is paying the premium in installments, the logic/fairness off an insurance company, after a write off, deducting from the payoutthe rest of the years premium .

If you had a small repairable knock they dont do it.

Suppose you want to buy exactly the same car and continue to insure it with the same company ?

You end up paying twice.

If you had paid up front in one installment you would be able keeep the insurance running and just change the car detials.

Correct ?

[GKP]

By making a claim for a 'write off' you're using up that year's insurance. The policy ends. When you buy your new replacement car, buy new insurance.

[elanfan]

If the car is written off you have received indemnity from the policy i.e you have 'used up' what you insured against on that car.

[Ocean]

What they said!!!

You aren't paying twice but you are receiving the benefit of the insurance by having them pay out on your car. They are paying you out on the proviso that you have paid your full premium.

Nothing sinister.

Ocean

[Sgwilliams]

normally insurance companies will ask for payment in full if an accident/incident happens, this is because your paying them to cover you for any damages, so your paying up so that they will pay out for anything

[WokingWedger]

But you dont 'use up the insurance' if you make a claim that isnt a write off.

The situation is that my wifes car has been declared a 'write off' but only just.

She only renewed her insurance this month (Nov) at approx £40 per month, so will have deducted from the payout 11 x£40 = £440. The cost of repair is a little above what the insurance company authorised, so by making it a write off they win hands down as they get to reduce the payout by £440 and we have to pay again to insure the next car.

Surely you are paying an agreed amount to insure a car for a set period. The fact that the car changes dosn't alter this fact (exact same model/ year etc).

[ZOLLAR]

WokingWedger said:

But you dont 'use up the insurance' if you make a claim that isnt a write off.

The situation is that my wifes car has been declared a 'write off' but only just.

She only renewed her insurance this month (Nov) at approx £40 per month, so will have deducted from the payout 11 x£40 = £440. The cost of repair is a little above what the insurance company authorised, so by making it a write off they win hands down as they get to reduce the payout by £440 and we have to pay again to insure the next car.

Surely you are paying an agreed amount to insure a car for a set period. The fact that the car changes dosn't alter this fact (exact same model/ year etc).

Nope, your paying for an agreement that should an accident happen between 2 dates then you will be put back into the financial position you were before the incident, other wise your insurance would say we will cover you for an unlimited amount of accidents between 2 dates.

[Sgwilliams]

WokingWedger said:

But you dont 'use up the insurance' if you make a claim that isnt a write off.

The situation is that my wifes car has been declared a 'write off' but only just.

She only renewed her insurance this month (Nov) at approx £40 per month, so will have deducted from the payout 11 x£40 = £440. The cost of repair is a little above what the insurance company authorised, so by making it a write off they win hands down as they get to reduce the payout by £440 and we have to pay again to insure the next car.

Surely you are paying an agreed amount to insure a car for a set period. The fact that the car changes dosn't alter this fact (exact same model/ year etc).

the car is still written off thou, whether its by a lot or by a small amount.

[Roo]

You pay for a years cover. The fact that your wife pays in monthly instalments is irrelevant.

You've used the cover in its entirety and they want the premium to pay for it that she agreed to pay.

[Magic919]

WokingWedger said:

But you dont 'use up the insurance' if you make a claim that isnt a write off.

This is true. However, the car is the subject of the policy. The car is written off and effectively ceases to be, hence the policy is deemed satisfied. Not all Insurers do this. As ever, read the policy.

[Dab of oppo]

I assume we are talking about private insurance here apposed to some sort of multi car traders policy?

[WokingWedger]

ZOLLAR said:

Nope, your paying for an agreement that should an accident happen between 2 dates then you will be put back into the financial position you were before the incident, other wise your insurance would say we will cover you for an unlimited amount of accidents between 2 dates.

But we are not back in the same situation as before the accident.

Before the accident, we had the car and insurance for a year !

Surely the insurance does cover you for an unlimited amount of accidents for a year (unless they cancel the policy)

You could have 2 or 3 accidents that in total add up to more than the car is worth.

I know we cant win this but it would make me feel better if I could see the other side of the argument.

[Meoricin]

When I wrote off my Focus the policy kept running, and I was able to transfer it to a new car for an administration fee. That was with Endsleigh, Fully Comp. Perhaps the difference was because I paid up-front?

Not all companies will end the policy with a write-off.

[WokingWedger]

Magic919 said:

WokingWedger said:

But you dont 'use up the insurance' if you make a claim that isnt a write off.

This is true. However, the car is the subject of the policy. The car is written off and effectively ceases to be, hence the policy is deemed satisfied. Not all Insurers do this. As ever, read the policy.

So when you change car mid term and apparently just pay more (never less) they are canceling one policy and starting another. But why does it then just run for the remainder of the year not start a whole new year.

[Ocean]

Okay then....

Suppose, notionally that your premium was £1000. You have agreed cover over the phone and you are on your way to the broker to pay. You crash and write off your car.

Would you expect to be paid? Of course not. The insurance to cover your car is £1000.

You have had the benefit of the policy by them paying out on your claim but surely it is only reasonable to expect for that to happen you have paid your premium.

You have now paid your year's premium and so I would assume you can change your car over to a new one and enjoy the rest of the year driving? Unless of course they are also cancelling your policy as well which some may do.

If they did not charge the full premium in the event of a write off it would not be beyond the realms of our imagination for fraudsters and generally bad people to pay a deposit make a dodgy claim and walk away with a settlement cheque after only paying out a tiny bit of cash.

In terms of asking for the balance of their premium, they are justified and correct. If however they are cancelling the policy as well and asking you to take out a new one on your new car then that is a different matter and one which people have different opinions on. Bottom line though.....it's all in the policy Ts & Cs and they are there to be read.

Ocean

[WokingWedger]

Ocean said:

Okay then....

Suppose, notionally that your premium was £1000. You have agreed cover over the phone and you are on your way to the broker to pay. You crash and write off your car.

Would you expect to be paid? Of course not. The insurance to cover your car is £1000.

You have had the benefit of the policy by them paying out on your claim but surely it is only reasonable to expect for that to happen you have paid your premium.

You have now paid your year's premium and so I would assume you can change your car over to a new one and enjoy the rest of the year driving? Unless of course they are also cancelling your policy as well which some may do.

If they did not charge the full premium in the event of a write off it would not be beyond the realms of our imagination for fraudsters and generally bad people to pay a deposit make a dodgy claim and walk away with a settlement cheque after only paying out a tiny bit of cash.

In terms of asking for the balance of their premium, they are justified and correct. If however they are cancelling the policy as well and asking you to take out a new one on your new car then that is a different matter and one which people have different opinions on. Bottom line though.....it's all in the policy Ts & Cs and they are there to be read.

Ocean

I have no problem with them having the full 1 year premium, but I expect 1 year cover. If the car was written off at the end of the year I would have had a full year cover. I should not suffer because it happened at the start of the year.

It is an inconvenience that they will take the money from the payout, but if they will cover a replacement car for the rest of the year that is fine. I suspect they wont, and the policy is not clear.

Edited by WokingWedger on Friday 26th November 12:48

[Mattt]

Roo said:

You pay for a years cover. The fact that your wife pays in monthly instalments is irrelevant.

You've used the cover in its entirety and they want the premium to pay for it that she agreed to pay.

Yes - always amazes me how many people don't understand.

You essentially have two ways to buy car insurance:

1) Annual Policy - paid in full up front

2) Annual policy - paid in full up front by a finance agreement, finance agreement paid monthly

You don't buy a 'monthly' car insurance policy.

[tog]

WokingWedger said:

So when you change car mid term and apparently just pay more (never less) they are canceling one policy and starting another. But why does it then just run for the remainder of the year not start a whole new year.

No, you're changing a detail of the policy, specifically the vehicle covered by the insurance. I've had mid-year refunds when changing from a high group car to a low-group car.

[WokingWedger]

Mattt said:

Roo said:

You pay for a years cover. The fact that your wife pays in monthly instalments is irrelevant.

You've used the cover in its entirety and they want the premium to pay for it that she agreed to pay.

Yes - always amazes me how many people don't understand.

You essentially have two ways to buy car insurance:

1) Annual Policy - paid in full up front

2) Annual policy - paid in full up front by a finance agreement, finance agreement paid monthly

You don't buy a 'monthly' car insurance policy.

I fully understand that paying monthly dosnt mean buying 1 month at a time and have no problem with either continuing the payments or even now paying the remainder as a lump sum ( I understand that the insurance company would worry that you would discontinue payments)

I dont understand why I (we)( She) has 'used the cover in its entirety'

[Deva Link]

Think of it like life insurance - you take out a years cover, then die after 3 mths and it pays out. Your widow can't transfer the remaining 9mths to her new partner.

As others have pointed out though, not all car insurance companies do end the policy. I guess only the crappier ones force you to take out a new policy. It's something to watch out for as your car gets older and is more likely to be written off by a fairly minor bump.