Car Insurance co "robs" mother of 4 of her car

hachette · 24th October 2008, 00:18

My friends’ car caught a fire during the night while parked outside her house on the 4th of Jan2008. The police were called but she never find out how and why it had happened. The Insurance Company were informed the next day or though they took the car away they not give any report what happened either. The car was worth around £8000. It was bought and given to her eldest son by her estranged husband few months back and registered in her son’s name. Originally he held an insurance policy in his name as he was the prime driver. My friend (his mum) had her own car at the time but subsequently her car had broken down and was no longer repairable. She has three more kids’ twins of 10 years old and 13 year old all with a medical condition as well as herself who has a very bad back problem. The car was absolutely essential to her life so she started using her son’s car on daily basis therefore became a prime driver of his car. In the circumstances her son telephoned the broker and informed them that he wishes to pass the ownership of his car to his mum as she drives it everyday and therefore take up a policy in her name as a prime driver and him as a second driver. I believe he has told them that the car is still registered in his name as a keeper (by the way he still lives with his mum) . They have accepted all this and issued her with an insurance policy for that car. That was on 17/11/07. Her son was told that he should register his car to his mum name and he has done so but not until 20/12/07 ( young people these days). So transfer documents were sent but they take up to six weeks to arrive. However when the young boy sent it he did not put the date when it was decided his mum will take the ownership of the car this being the date when the policy was taken 17/11/07 but he put the date when he was actually sending the document to DVLA this being 20/12/07. The rest you can imagine. Car catches fire on 4th Jan 08. The claim is made and months pass by and they still not paying out..
During all that time they request to see registration document. She could not provide this as it was sent to DVLA and not come back yet. She therefore provided them with a New Keepers part of the log book but that was not sufficient for them to consider the claim. She has made numerous phone calls to DVLA asking for a log book but was told that her insurance company informed them that she is no longer in possession of this car therefore they can not issue her with a log book.

We came to a “no go” situation. The insurance company will not pay out without seeing the log book and DVLA will not issue one and subsequently had lost the original form of transfer. She was asked by DVLA in March to request for a copy so form was filled again but despite of that registration document had not arrived to this date. In June she had asked me for my help. I wrote letters and made phone calls regarding her claim and also got nowhere.

On 17/7/08 after yet one more call to the insurers not returned I thought enough is enough I made a claim against Chaucer insurance on her behalf on line. We got a solicitor, she was awarded legal aid. We thought this can be decided by court. The solicitor takes an advice from barrister who tells us we have no chance of winning this case. Apparently the insurers defence is that you must be a registered keeper and owner of the car at the time you take up a policy. So why did they insure my friend knowing that at that time the car was still registered in her son’s name. They query that the transfer was not done until 20/12/07, but the accident did not happened until 4/1/08. Does this mean that if nothing had happened for a years on these basis she would not really have been insured at all? There is so much more to this story. We are not giving up. Taking up a second opinion as soon as possible plus requesting the transcript of the conversation with the insurance brokers when they issued my friend with a policy is our next step. Any advice would be very much appreciated.

patdavies · 24th October 2008, 09:26

Quote:

Originally Posted by hachette

Apparently the insurers defence is that you must be a registered keeper and owner of the car at the time you take up a policy.

This must be a contract term by the insurer as it's is certainly not a legal requirement.

One has to assume therefore that this particular insurer does not insure anybody who has a car on HP or personal lease. I would also argue that possession of the 'green slip' part of a V5 is evidence of registered keepership (it's certainly good enough for Police and VED)

In any case, I would go back to the broker and hope that they back up your friend's version of events (anything in writing?) as either the insurer or the broker is at fault for selling/issuing the policy knowing that the circumstances pertaining did not meet the insurer's criteria.

Mossycat · 24th October 2008, 11:16

Quote:

Originally Posted by patdavies

This must be a contract term by the insurer as it's is certainly not a legal requirement.

One has to assume therefore that this particular insurer does not insure anybody who has a car on HP or personal lease. I would also argue that possession of the 'green slip' part of a V5 is evidence of registered keepership (it's certainly good enough for Police and VED)

In any case, I would go back to the broker and hope that they back up your friend's version of events (anything in writing?) as either the insurer or the broker is at fault for selling/issuing the policy knowing that the circumstances pertaining did not meet the insurer's criteria.

I am sure that the Insurer concerned will insure cars on lease or HP and equally sure that they won't use that as an reason not to pay out on those policies.

It comes back to whats called 'Insurable Interest'

In the early days of insurance ship owners would insure the ship, the cargo and if it sunk they got paid out. All perfectly above board. Then some dodgy ship owners started insuring the life of the Captain as well, so if anything happened to the Captain they got paid out even if the ship made it to its destination cargo intact. Captains started 'vanishing' at sea, a lot suddenly 'fell overboard', infact dodgy ship owners were paying a crewman to kill the captain and making a tidy profit. So Insurers started to insist that unless you had a financial interest in what you were insuring you couldn't insure it, this is now built into ALL policies.

Skip forward to today, if someone has a car on HP or lease they do NOT own it but if anything happens to it they do have a financial liability to the owner, that's an insurable interest.

If that didn't exist I could insure every car in my street and then if something happened to any or all of them (from genuine accidents to arranging a few thefts or fires) I could claim on them.

I agree that the best course of action is to go back to the broker and get a 'statement of truth' from them stating exactly what they were asked to do and what they did.

On the face of it (from what has been written in the OP) it does appear a genuine case and I would think that the broker needs to get involved and help sort this mess out.

Mossy

(PS Apologies for the history lesson but I couldn't think of a better way to explain it)

Mossycat · 24th October 2008, 11:21

OK I'm a bit confused here.

The insurers have REFUSED to pay out for the car therefore the car does not belong to them it still belongs to the mother. The mother as legal owner is ENTITLED to the V5.

DVLA are acting on 'hearsay' and not fact. The car has not yet been written off or scrapped.

Am I missing something here?

Mossy

hachette · 24th October 2008, 15:20

The Insurers have still got the car. We have no idea where it is kept or if it has been scraped. DVLA said they cannot issue her with a logbook as she is no longer of the possesion of her car. She is left with nothing. I still can not believe that such situation could happen to a normal person who believed that she did everything according to law. After all how many of us read 30 or more pages of our insurance polices. And even if we did how much of it is understandable to most of us. Also policy is always send after the insurance has been taken. So how are we supose to know all these things? This was the only car left in the family. Her life since has been one huge stress.

rudekid48 · 24th October 2008, 15:46

Who is the Broker?

hachette · 24th October 2008, 16:07

Grove and Dean Ltd

Mossycat · 24th October 2008, 22:14

The vehicle in question CANNOT be scrapped (let's rephrase that, SHOULD NOT have been scrapped) because the legal owner (son or mother has not consented to this), the Insurer has most liukely removed it to the holding/storage area of a scrapyard they use.

If the Insurance Company are not/have not paid out on it then they cannot tell the DVLA it is scrapped.

Go back to the DVLA and state this using a very firm tone, that car is still your property and they have acted on the word of someone who has no interest (as yet) in the vehicle.

See what the V5 says regarding keeper details when you get it.

Also demand to know where it is now from the Insurance Company, sometimes scrapyards 'jump the gun' with disposing of total loss vehicles, particularly ones they have had for a long time. So go check to see it is where they claim it to be.

Mossy

JonCris · 24th October 2008, 22:47

The DVLA are being their usual obstructive self & the insurer is splitting hairs & as car states the policy holder does not have to be the owner but only someone with an insurable interest

Also I'm afraid to say the legal advice appears to be wrong

If you have a broker part of the premium includes a service charge make them earn it & ask them to sort it

& finally she made not need legal aid as some lawyers might be willing to take this on No win No fee

hachette · 25th October 2008, 01:25

Even if DVLA did send her the registration document now, the fact is her son dated the transfer 20/12/07 ( date he posted it) not 17/11/07 when the policy and ownership had been agreed to be in his mum name.Therefore according to their policy ( you must be registered keeper and owner when you take up their policy ) makes her insurance invalid. She did get legal aid as she is on income support. I also think that legal advice is wrong, but they did suggest she should sue brokers since they allowed this policy knowing that V5 was not in her name at the time. As to her car the insurance company when they refused to pay her claim they wanted to return it to her. She was so shocked she said you can not do that. So they kept the car . If it is scrapped or not we do not know. I can make more calls to find out but is it wise to make any contact with them or their lawyers once the legal proceedings have been issued?

JonCris · 25th October 2008, 02:09

Who & who isn't the the lawful owner is a smokescreen.

The owner DOES NOT have to be the policy holder. The only requirement IN LAW is that the policy holder should have an insurable interest.

As for the mix up with dates the insurer is nit picking in the hope they won't have to settle

OP seek further legal advice.

hachette · 25th October 2008, 17:54

Her solicitor told us that there are insurance requirments in Law but there is different insurance Law within insurance companies. Which one should one follow ?

JonCris · 25th October 2008, 19:20

Really.............. Ask your solicitor to provide details of the 'law or 'laws to which he's referring.

I repeat there is NO legal requirement for the policy holder to be the owner. The ONLY requirement is that the policy holder should have an insurable interest which does of course include a driver of the vehicle

hachette · 25th October 2008, 22:11

So why do we have this situation. Of course she had insurable interest in this car. It was the only car in the family and she was driving it everyday while her son (registered keeper was at work). She has taken insurance for that car as a prime driver according to the requirments of the policy. If she did not and had an accident would the insurer argue that as she did not tell them that she was a prime driver therefore her claim also would be refused.

I would like to thank everybody who gave us some great advice. It was very helpful. When we left the solicitor's office we thought this is it. They won. Now I feel that she can really fight and win . The truth is that when she made a claim she never thought it can be refused and she had hired a car that as I have mentioned before was essential to her life. After 7 months the bill has gone into a thousands of pounds. So even if they do pay her for her car the money will have to go towards that debt. If they do not then she will be thousands pounds in debt and no car that was worth £8000. When I took action against her insurance co on her behalf I included the money she had to spend on the hire car (she only paid some of it). Mossycat you have been in insurance business for years could you give us some opinion regarding the losses she had suffered due to insurance company not paying out.? Thank you.

JonCris · 25th October 2008, 22:46

Hatchet that's exactly what I'm saying

Mossycat · 25th October 2008, 22:47

Ok to summarise (tell me if I am missing anything or if you have any more to add)

The mother had a car and the son had a car at the same time.

The mother scraps her car and the son passes ownership of his car to his mother on the basis of need. Ie Her need was greater than his. (Question, Did the mother pay for the car, or make a promise to pay for the car, or was the car gifted, or was the idea for it to be loaned on a temporary (long term) basis).

Son notifies broker, they arrange a new policy in the name of the mother and advise the son that the car needs to be in the name of the mother (Question was this notification in writing).

Question - Did the broker NOT refuse to quote or grant cover on the basis that the registered keeper was not the policyholder?

At some stage the mother must have completed an insurance proposal for this car OR have effected a change of vehicle on her other policy (if it was still in force). The son cannot arrange an insurance policy on behalf of his mother.

Did they receive the new policy from the Insurers, ie the one in the mothers name naming son as additional driver?

Question - Are the insurance companies the same (ie the original policy the mother had is it the same company the son was with, and is it the same company that then accepted the new policy (ie with mum owning son's car)

Question - Was Mum named to drive the car the son owned when it was in his name (ie on his original policy) and was the Son named to drive the other car that Mum used to own on her old policy

Question - Who was the last person to use the car before it caught fire, ie who parked it up?

Finally you state you made a claim against Chaucer. Can you expand on that, did you issue proceedings or do you mean you wrote to them on behalf of the mother?

This is a complicated issue, the answers you give will help me to ascertain what (if anything) else I need to ask and then hopefully I can give you my advice on your options.

Mossy

JonCris · 25th October 2008, 22:55

ALL losses incurred as a direct result of their actions or rather lack of can be added to your claim. This will include loss of amenity, storage (if any) Replacement hire (after a reasonable period when they should have met the claim) Telephone & postage.

In fact if proven that the claim should have been met sooner & wasn't they have actually left themselves liable for the consequential losses, losses which are normally not recoverable by a policy holder

Mossycat · 25th October 2008, 22:57

Quote:

Originally Posted by JonCris

ALL losses incurred as a direct result of their actions or rather lack of can be added to your claim. This will include loss of amenity, storage (if any) Replacement hire (after a reasonable period when they should have met the claim) Telephone & postage.

In fact if proven that the claim should have been met sooner & wasn't they have actually left themselves liable for the consequential losses, losses which are normally not recoverable by a policy holder

Not true

The mother has a duty to mitigate her losses.

Mossy

hachette · 25th October 2008, 23:50

Mossycat and JonCris thank you for your replies. I will print the questions that Mossycat asked and do my best to reply but must contact my friend first to be sure what had been said to insurance/brokers . I think I do know but in the view Mossycat questions I need to check it with her again.

JonCris · 26th October 2008, 00:19

Quote:

Originally Posted by Mossycat

Not true

The mother has a duty to mitigate her losses.

Mossy

I'm afraid it is true if the insurer by their actions caused their insured to incur extra but essential costs/charges

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