Last year my partner had a small bump in my car, no one was hurt and there was very little damage to either car. I was insured and he was insured on my policy fully comp.. I filled out the claim forms with all the details sent them off and thought that was it.. I have since changed my policy as I felt that my previous insurers almost quadrupled my premium because of this accident especially as I had full no claims when going with them and also found out that they had dropped two years off my no claims as they said they only go as far as 5 years NCB.

Any way I get a letter today from the third parties insurance stating that my insurance company has not paid out and that they are holding me responsible for it, asking for solicitors costs and court costs if my insurance dosnt pay out within 14 days.

Admittingly I do find the £800 a bit steep for a cracked number plate and fittings and no one was hurt. But thats niether here nor there. I have not heard anything from my previous insurance company to state that they are disputing this and was with them up until two months ago so I was fully paid up on my premium.

can insurance companys refuse to pay out willy nilly without reason or do they have to pay up. I cant afford to pay out the £800 I thought that this is why we have insurance?? any help would be most helpful

Believe it or not this is quite common. I doubt your former insurer is disputing the claim they are simply dragging their feet so the 3rd party solicitors are trying to provoke some action from your insurer by advising you that you are about to be sued. In otherwords they want you to get on the phone demanding of your insurer that they sort it forthwith

I should write to them with copies of the letters you have received telling them if they don't sort it out now & you are sued you will not only introduce them as a co-defendant in any said action but will also seek damages from them as well as making a formal compliant to the FSA

In fact I should 1st phone telling them of your intentions then send the letter confirming it