Making Car theft Claim. They refuse to cancel policy!

[scott808]

My car was stolen last month so I'm making a claim with my insurance company. The insurcance I have is very expensive, nearly £90 a month. When I phoned them to start making the claim I asked them to cancel my policy as I no longer have a car so am not using it now.

 

The first person I spoke to told me that I had to keep paying it while the claim was being proccesed, and then only if it was susccessful would I get a refund. And if I cancel the policy the monthly DD before then I also can't continue the claim ...But today now three weeks since it started, they phoned to take details of what happened. When I checked today about it the guy told me that I now have to keep the policy for the full year whether I have the car or not and cannot cancel as I'm in a contract, which I'm not according to the £25 cancellation fee they charge and what I know of car insurance policy's!

 

He started to say it was because I pay monthly, then when I asked if I had paid in full he told me that I would also have not been able to get a refund for the 8mths left on it. I can put another car on it though.

 

Can this be true, or are they trying it on as I really need to get it cancelled as I can't afford the extra money I need to replace the car?

 

Cheers

Scott

[Mossycat]

The insurers are quite correct in what they tell you.

 

On the day you took out your policy the premium 'x' was due, some insurers allow you to pay this figure monthly. If your car is a total loss or a stolen not recovered then your insurers will pay out the market value of the car. In almost every motor policy you will find it written in to the terms and conditions that in the event of a total loss payout the full premium must be paid.

 

Mossy

[vusys1]

if a car is a total loss,how can the insurance company insist that the policy be kept live? if the policyholder does want to cancel, then correctly the full premium would be due. Surely if a car is written off the insurance company have to take the vehicle off cover and update the mid database within 7 days (think thats the current turn around time) as they could get fined if they dont.

[scott808]

Oh right, I was hoping to be able to save some money while I didn't have any bills from having a car.

 

Will they now try and increase the price of the insurance due to the claim this year? And can they remove a previous 1 years no claims after paying out and increase the cost for the rest of the year that way too?

 

...And what about if you pay the year up front? I don't understand this as would you then be able to get the months left refunded?? And the part I really don't understand is that they would allow me to cancel the policy if it had been for a third part claim! That makes it seem like theft if you ask me, as they only do it when you definitely won't have a car for the insurance to cover, so they get £90 a month for NOTHING.

Edited July 14, 2009 by scott808

[bigegg]

but they'll pay you out - to supposedly replace the car with an identical model - which will then be covered for the rest of the policy term.

 

Insurance is to put you in the position you were in before the claim - no better, no worse. [1]

 

 

[1] Thinking about it - if you're allowed to cancel before claiming, and you can't cancel afterwards, that means you are in a worse position than you were before?

[scott808]

Yeah thanks guys, that sounds like the way to approach it. ...Just got to start to rewire a little now!

[gyzmo]

In these matters, you have a contract with your insurer which states that, in return for the premium, they will fix your vehicle or make a payment for it if anything happens during the term of the policy.

 

They have fulfilled their side of the contract. They now expect you to fulfill your side of the contract by providing the premium you said you would.

 

Monthly payments are merely a payment method - not payment for a specific proportion of a year.

[scott808]

"If the policy has started and you cancel within 14 days of it starting or

within 14 days of receiving your documents (whichever occurs later),

we will return any premium you have paid less a cancellation fee of

£25 (excluding Insurance Premium Tax charged at the current rate).

At the rate of 5% applying when this document was printed, this

means a total cancellation charge of £26.25. This is as long as no

claim or loss has arisen in the current period of insurance. Please return all your documents after cancelling the policy."

 

That's all I could find in the stuff they have given me.

 

"current period of insurance" Anyone know exactly what they mean by that, is that a certain amount of time before I can cancel? Any size and type of claim? Can I then not cancel until the full year is up (current period)?

[gyzmo]

The period of insurance is generally a year from when the policy started (or was renewed). The size or type of the claim does not matter.

 

Like I said, they have fulfilled their end of the contract and expect you to do the sme by paying the premiums.

[scott808]

Yeah it seems like it. Thanks for all your help!

[LemonTwist]

"If the policy has started and you cancel within 14 days of it starting or

within 14 days of receiving your documents (whichever occurs later),

we will return any premium you have paid less a cancellation fee of

£25 (excluding Insurance Premium Tax charged at the current rate).

At the rate of 5% applying when this document was printed, this

means a total cancellation charge of £26.25. This is as long as no

claim or loss has arisen in the current period of insurance. Please return all your documents after cancelling the policy."

 

That's all I could find in the stuff they have given me.

 

"current period of insurance" Anyone know exactly what they mean by that, is that a certain amount of time before I can cancel? Any size and type of claim? Can I then not cancel until the full year is up (current period)?

 

The current period of insurance began either when you took out or renewed the policy, whichever is the most recent. As a claim has occurred in the current period of insurance, you won't be able to cancel under this clause. I can tell this is a Royal Bank of Scotland (eg Churchill or Direct Line) policy wording. On page 11 of the Churchill policy it says:

"We will not refund your premium if you have made a claim or if

one has been made against you during the period of cover. If you

are paying by instalments you must pay the balance of the full

annual premium." The Direct Line version is very similar, ie they won't refund any of your premium if you make a claim, so even if you pay monthly the full year's premium will become payable.

[gyzmo]

Any insurance contract will say it, I presume. It's a basic principle of performance of contract, but one that very few seem to understand or accept as being fair.

[scott808]

I'd never heard of it before with car insurance claims. I thought I would have.

 

I still can't get passed the idea of a company that you have to have insurance with getting to make the contracts and them being fair still!

 

They seem to be getting on with my claim now though. The guy who phoned to access the value of the car seemed fair...I guess they have to be. Really its quite good value for money really (as the cars been stolen;))as the fire and theft part of the policy is only a small amount of the money I have been paying, and only a little more than just third party. ...But they still are getting money each month for nothing until they pay up, which I'm hoping won't be 'months'.

Edited July 16, 2009 by scott808

[cvb79]

Direct Line are totally useless!! My 2005 VW Golf GT TDi was stolen in February this year and then the buggers set it on fire!! I can only assume it was used in a crime or something and they wanted to destroy evidence?! As I lost one of the keys to my car the year before on a night out, Direct line have refused to pay out saying that the car cannot be stolen without a key!! Funny thing is though, in their report they have said that when the fire brigade found my car, the engine was still running, yet there was no key present!! Kind of contradicting themselves here eh!! I am now seeking legal advice.

From doing a quick search on the net, it appears that Direct Line are well known for this kind of thing, so I really would NOT recommend anyone going with them!!

[scott808]

Mine have paid out now...including for the roof rack and carrier and a satnav (only because it was in the boot though!). ...still waiting for the cheques to clear... They have had since it started £130 of insurance payments for nothing basically as they also stop the cover for driving another car under the policy until the claim was completed, so I couldn't use my mothers!

 

Mine had me walking round my flat trying to find the key I knew I had still while also having to speak to them on the phone. Sounds like I was lucky I never lost one!! My car had an immobiliser and alarm... I think they must have put it on the back of a flat bed while acting like they were towing it.

Edited August 16, 2009 by scott808

[vusys1]

Direct Line are totally useless!! My 2005 VW Golf GT TDi was stolen in February this year and then the buggers set it on fire!! I can only assume it was used in a crime or something and they wanted to destroy evidence?! As I lost one of the keys to my car the year before on a night out, Direct line have refused to pay out saying that the car cannot be stolen without a key!! Funny thing is though, in their report they have said that when the fire brigade found my car, the engine was still running, yet there was no key present!! Kind of contradicting themselves here eh!! I am now seeking legal advice.

From doing a quick search on the net, it appears that Direct Line are well known for this kind of thing, so I really would NOT recommend anyone going with them!!

 

Have they said anything else about forced entry (damge to door handles,frame etc,unless they broke the window) but surely the driving column would have been damaged to get at the key barrell? if you have lost a key they should not kick out the claim on that basis.

 

Bet i could steel a VW without a key, its called a low loader and a winch

[Wulfyn]

The reason why they can do this is a very technical part of what insurance does - to indemnify you against loss for a certain period of time. That you pay by direct debit only confuses the matter. You should not think of paying in installments as paying for your insurance in installments because that is not what it is. What happens is that a finance company loans you the money to pay the entire balance of the insurance contract, and then you repay them the loan.

 

 

Getting the difference helps a lot in inderstanding what the insurance contract provides, because now you understand that you are not paying 'a month at a time', you are simply repaying a loan.

 

So I'm the insurance company and I offer for the fee of £500 to cover you for damage to your vehicle and for any damage that you are liable for through using that vehicle for a period of up to one year. So we strike a deal and a week later your car gets stolen and never recovered. Now a couple of things kick in here, but mainly we are in a total loss situation - that means that once I have paid you for your total loss the contract is considered as complete and finished. It's the lack of having anything left to insure that triggers this.

 

So you paid me £500 to cover you, and I have done just that. It doesn't matter at what point during the year you make this claim, but naturally some time limit has to occur. That you pay by direct debit makes no difference as you still owe the finance company whatever part you have not paid fo the £500 they lent you to pay me.

 

 

Does that make more sense now?