A question about : Total loss claim settled but policy not cancelled.
I had a burglary at my home and the theif took a set of car keys and a car. The incident was proven to the police,CCTV etc.
My car insurance company accepted the claim and although the vehicle was recovered they deemed it a total loss. They settled quickly and made payment minus excess and minor costs.
All good.
That was 6 months ago, but today I got a renewal notice for the written off vehicle. I phoned to be told that this policy was still live and that I had been paying for it monthly.( I know I should have noticed earlier!!!!!!!)
I explained that this was a clerical issue on their behalf and that as they had bought the leagal ownership of the vehicle and made full settlement on the policy that the insurance for that vehicle should have been cancelled.
They first claimed that unless I could prove I had specifically cancelled the policy then I am liable, even though the car was their property and had been subject to a total loss claim for the vehicle.
They now say I was at fault and they had invoked their right to collect the rest of the annual installments on the policy. This is nonsense as the first representative confirmed that the policy was still live and that the renewal notice was issued, and that normal practice was to adjust the total loss settlement for any policy costs. She also said collecting the additional premiums was wrong policy.
My point is as follows;
1. They accepted the claim and settled for a total loss but then kept the policy live for the same vehicle, I dont think this is normal practice!
2. They are asking me to prove that I had specifically cancelled the policy. I assumed their acceptance of a total loss and full and final payment implied this! Although I did cancel at the time.
3. I have technically been uninsured on my new policy as I used the no claims from the claimed policy for my new insurer whilst the other policy was running. This is unforgivable.
4. This is a clerical error, they issued a renewal notice for me to pay for a policy for a written off vehicle that they technically owned, I dont think so.
Interested in comments etc, any motor insurance gurus out there?
Best answers:
- Unless they deducted the remainder of the annual premium from the total loss payout then they would expect you to continue to pay the remainder of the premium monthly.
Motor Insurance policies are usually annual contracts whether they are paid monthly or not and if a claim is made which the insurer cannot recover their outlay the premium would need to be paid in full whether cancelled mid term or not.
You have a case for a complaint if they have deducted the premium from your settlement and charged you monthly. You don't have a great deal to be upset about if they have only charged you once. - How did you manage item 3 - used the NCB on a policy you had just claimed on with another company? Did you declare the claim?
- Yes, the vehicle was replaced a month later and the claim was declared as was the policy to use the no claims discount.
- 2. They are asking me to prove that I had specifically cancelled the policy. I assumed their acceptance of a total loss and full and final payment implied this! Although I did cancel at the time.
Probably reasonable if they did not deduct it from the settlement figure.
So the total loss of the vehicle and a subsequent settlement by the insurance company is not enough for them to cancel the policy.
Yes thats logical, I would have needed insurance on a vehicle that they now owned and I could not drive.
Their systems failed to acknowledge that a total loss claim had been settled on this policy and that I had cancelled the policy when they settled.
If they intended to recover the balance of payments for the rest of the year then this should have been included in the settlement figure.
There policy is that they hold the option to continue with the policy for 6 weeks after the claim in case I want to use this policy for the new vehicle, this was confirmed to me today.
This policy is still live (they have confirmed this), they have sent me a renewal notice.
Also, my other vehicle was due for renewal after the theft, and even though both vehicles were comp with protected NCB they both took a hike in price at renewal. It was explained that the NCB had been stepped backwards.
This is insurance speak for Protected NCB is not actually protected, we screw you anyway, its in the smallprint. - I don't understand the problem - cancel the renewal. Whether they continued cover (accidentally) or not, it makes no difference - the cost of the policy would still be due. If you check your policy documentation it will confirm that where a claim is made the full years premium remains due.
- It sounds like an error of some sort, but I'm struggling to see how you've lost out as a result.
When a total loss claim is made the policy generally comes to an end, and no refund of the original premium is made, or if you were paying by installments the remaining installments are still due. The norm is that the remaining installments would have been deducted from the total loss settlement, but if they haven't done that and have continued taking them monthly instead then financially you're in the same position as you would be if they'd done things the normal way. If anything you're slightly better off because you've had the extra money in your bank account earning interest (obviously not a lot at current rates, but possibly more than nothing) for several months.
It is a bit daft sending you a renewal letter at this point, but other than not renewing it, what do you actually want them to do to put things right?
It's normal for your premium to go up after a theft claim. If your NCD is protected you will still get a discount on the increased premium - so the final figure will not go up by (anything like) as much as it would if you'd lost your NCD as well. - If you try to insure a car that is unroadworthy, or has been scrapped, the insurers will be quick to tell you that they will not cover it.
Yet they allow themselves to do exactly that?
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