XS Direct 3k Total Excess - Worried regarding Debt Collectors

[unclebulgaria67]

So this excess applies to all claims, even liability to third parties ?

 

If this is true, i am surprised it complies with requirements under Road Traffic Acts. Perhaps the Insurers pay out to the third party the amount due and they come after you for up to £3k. It would be same as any other debt. Debt collection letters requesting payment and then eventually they would go for a CCJ, which they would seek to enforce.

 

The other issue is that if you did not enter into a repayment arrangement with the Insurers, is that they would most likely cancel your policy. This would make getting future Insurance difficult and much more expensive. Probably best to seek full information of the loss the Insurers want you to pay and seek to enter into a repayment arrangement over a necessary period, which might be several years.

[unclebulgaria67]

I think you misunderstand what will happen. It will be a claim against your policy, affecting your no claims discount.

 

Your Insurers will pay the third party and it will be a debt your Insurers chase you for.

 

You could of course ignore them, but the consequences might make it worse.

 

Cancelled Insurance on your record and a CCJ.

 

What you don't know yet is whether the third party intends on making a personal injury claim.

 

So you can't really just opt to pay the third party and ask your Insurers to stop being involved.

 

This could be a £10k claim with personal injury included.

[unclebulgaria67]

Speak to the claims handler about your concerns. I don't think they will remove your claim in regard to no claims discount, if you managed to settle the third parties claim direct with them.

 

 

The third party has 3 years to register a personal injury claim, so there is still a risk, even if currently the third party has not indicated an injury.

 

Personally, i think you let the Insurers settle the claim and agree a repayment over a period of time, provided no interest or charges added.

[unclebulgaria67]

Jayden

 

Dacouc highlights what your next step is, which is to get hold of information, which might help to prove miss selling.

 

You can get the information from the comparison site about the quote you had via them. Just contact their customer services.

 

In regard to your Insurers, suggest you send them a subject access request for copies of everything. If you spoke to them, you can also ask them for a copy of the recording of the call, if they still have it. In the request make sure you specifically list what you want to see, otherwise they will just print off their computer data.

[unclebulgaria67]

Agree. But Jayden do not rush into making the FOS complaint. Obtain all of the information first and if you find that you were never told explicitly that the excess applied to third party claims, then make the FOS complaint.

 

The FOS have changed their processes over the last year or so, in order to speed up the complaint process. If you rush into a complaint without the evidence needed to support your complaint, you are likely to be fobbed off quickly. They won't spend months looking into something, based on you just being unhappy, when you don't have much to justify the complaint.

[unclebulgaria67]

I think your only chance is to make an argument under unfair trading law and to get specific advice. When you buy Insurance online, you can normally go to the Insurers site to read the policy wording. Failing that, you have a 14 day cooling off period after receiving the documents to study the terms and to reject the policy. This is what the policy says on page 5.

 

All Sections Excess –

 

no alteration to protection provided

 

Under the Road Traffic Act, a person may not use a car in a public place unless there is an approved Policy of insurance in force. The Underwriters may however insert conditions in the Policy which limit or restrict the liability of the Underwriters to the Policyholder. However, there is no reduction in the protection provided by the Underwriters to the Policyholder in relation to their liability against claims from third parties as a result of the use of the car. The excess is valid between the Underwriters and the Policyholder as long as this does not affect any person entitled to recover damages in accordance with the Road Traf c Act. Therefore, in the event of a third party claim, the Underwriters will remain liable but the Underwriters are entitled to recover up to the excess amount from the Policyholder.

 

The argument under unfair trading law might well be that the Insurers are by contract entering you into a future possible credit debt obligation, just by having an accident with a third party. Neither the Insurers or the comparison site provided any clear explicit upfront warning of this and you believe it to be unfair. The reason that it is unfair is that most people buying Insurance would believe they had full excess free cover against third party claims and if this Insurance was totally different there should be a clearer upfront warning.

[unclebulgaria67]

I am not convinced the FOS will be helpful, without more information. See what you can get hold of and then you could present it to the FOS. But you would need to make the case to them properly.

 

See what you told on the comparison site and Insurers site when you bought the policy. I am not sure all sections excess is enough. It should tell you of a possible debt, as the excess also applies to third party claims.

 

Your Insurers may not take it to court, they normally sell these debts. But you should dispute as best you can and see what happens.

[unclebulgaria67]

What paperwork ?

 

If it is asking you to confirm you will repay the Insurers how much they pay the third party, then you should NOT complete that.

 

Register a complaint with the Insurers that you believe the policy was sold to you on an unfair contract basis i.e no explicit warning of excess applying to third party claims and of a possible debt obligation by contract term, not explicitly mentioned when buying the policy.

[unclebulgaria67]

Its an accident report form requesting certain pieces of paperwork from myself so they can "represent me to the best of their ability".

 

Link to what my claims handler is asking for: http://imgur.com/a/IB5na

 

So I register a complaint and does that automatically put the case on hold as they investigate further?

 

I take it I call XS Direct, my insurers handling the claim and not Insure Your Motor ?

 

When you complete the form, just provide the accident information known to you. Add a note to the form that you dispute the excess applying to third party claims as an unfair contract term, not explicity mentioned at point of sale. Complaint with referral to FOS if required.

 

In your policy wording, it should have a section about complaints and who to register this with. As it relates to the sale of the policy, perhaps you need to register this with Insure your motor with a copy to XS direct. If this excess is subject to a complaint, then in terms of XS trying to reclaim it from you, they will pause debt collection while a complaint is ongoing.

[unclebulgaria67]

I know it is a bit old fashioned and people are out of the habit of writing letters, but you are best to send a letter headed ' official complaint for FOS purposes'.

 

In your letter you just need to explain why you believe that the policy contract that has been sold is an unfair contract, because at the point of sale, it was not made explicitly clear the all sections excess includes third party liability claims.

 

In the event of a claim, this means that by contract XS direct are trying to obligate you into owing them a debt up to £3000.

 

You believe that such a term is unfair if it was not made explicity clear at the point of sale.

 

I think you need to send this to your brokers Insure your motor with a copy to XS direct.

[unclebulgaria67]

Just see how it goes. If you arranged cover by phone and it was not explicitly mentioned that there was up to £3000 third party excess, then Insure your motor might have to see what the FOS says, if XS direct won't waive it.

 

CAG does not recommend dealing with complaints by phone, unless you are recording the conversation.

[unclebulgaria67]

Yes. You always have to think from your perspective, how you would possibly send phone call conversations to the FOS or use them in court proceedings.

 

What happens when they sue you for £3k and you have to produce information to a court. You mention a conversation on a certain date, no call recordings are available.

 

Always better to have your own records, whatever company you are dealing with

[unclebulgaria67]

Yep post office counters will give you a proof of posting slip.

 

The other alternative is an email to them. As long as you have something in writing.

[unclebulgaria67]

Ask for a copy of the call on a CD. Send them a CD for them to burn the call onto.

 

I think your complaint is difficult, because clearly you were not thinking you might owe XS Direct a debt of up to £3k if you had an accident and how you would pay it.

 

If you think about it, you would still win by going to the FOS, because it would buy you time, even if the FOS rejected your complaint.

 

Your complaint is that it is not explained that by taking out Insurance with an all sections excess, you are agreeing to taking on a debt of up to £3k simply by having an accident. There is no explanation of how such a debt would ever be managed by Insure your motor or XS Direct.

 

Most Policyholders in this situation of having an accident are not going to have savings of £3k, so in most cases there will be a debt.

You were never asked to sign any consumer credit agreement or other finance agreement related to a future possible debt.

 

The contract offered therefore seems to be missing an important element, which is a full explanation of treatment of debt in the event of an accident, where the policyholder is expected to pay up to £3k, which is not an insignificant sum.

 

That is how i would approach it. You can develop your complaint further later in the process, looking at ICOBS and Consumer Rights Act.

 

Given that you don't have £3k to hand at the moment, then why not take the complaint as far as you can with the FOS.

 

I don't think the Insure your motor letter is a final response (?), so send them a letter saying what i said above and that you would like the FOS to look at this further considering ICOBS and Consumer Right Act.

[unclebulgaria67]

If the response is final, yes just start the FOS complaint process and let Insure your motor know that you are doing so.

 

With FOS, you can just complete the form on their site and post or email it to them. If you phone them, someone is trying to type what you are saying, so better to just complete the form, so you can make sure it is clear.

 

When you complain to the FOS, ask that they review the complaint looking at ICOBS and Consumer Rights Act in regard to selling you an Insurance that includes a future possible debt obligation without providing any information about how such a debt obligation might be administered. The contract is therefore unfair, as no alternative was offered without having this future debt obligation.

[unclebulgaria67]

Could take months. Don't fall for the FOS fob off.

You might have a complaint handler try to refuse your complaint, purely on the basis you were told about the excess.

 

Ask that the complaint is escalated to an Ombudsman to address the debt obligation without explanation in regard to consumer credit and unfair terms.

Without advance information how would the Policyholder be in a position to decide whether to accept the contract, when an alternative was not offered.

[unclebulgaria67]

But as soon as you have an accident with a debt obligation of up to £3k, they are inviting you by contract to become involved in paying them back the relevant sum. Given most people don't have £3k in savings, then an arrangement would have to made, but no details are given upfront. It would not be exact, but it might be them saying that they would allow x no. of months to pay, no interest would be charged etc.

 

And they offered no alternative. If the premium was only £50 more expensive per year not to have this £3k excess applied to third party claims, then surely that was something reasonable to offer an an alternative. If they said that by having a fault accident, you would have a debt owed to XS Direct of up to £3k or if you paid £50 extra premium, they could offer a policy with no third party claim excess.

 

Make the argument and see what happens.

[unclebulgaria67]

Think you might be misunderstanding this and you need to be clear.

 

You are legally required to have third party insurance by law under Road Traffic Acts. Your Insurance is noted on Motor Insurance Database. What your policy says on third party liability, is that XS Direct will deal with third party claims on your behalf. But there is an excess of £3k and in the event of a claim, XS Direct will settle the third parties claim in full, but you would have to refund XS Direct up to £3k. They are NOT leaving you to deal with third party claims directly, as i then doubt the Insurance woulld comply with Insurers legal requirement on third party liability cover.

 

If you look at what you were told on the phone when arranging the policy, they are making a big assumption that you have £3k savings to pay XS if you had a fault accident. Yet they never really explained the claims process and how you pay XS the £3k back, if you did not have the money. They are telling you by buying this policy, that you could owe XS Direct a debt of up to £3k and not telling you the terms. This cannof be right and must be an unfair contract. This unfairness is made worse by no alternative being offered.

 

With a normal insurance policy you have an excess on damage to your own car and if you did not have the excess money, you would have to save up, before getting the car repaired.

 

You don't need any evidence, other than the policy you were sold and the information on the sales process e.g call recording. It is then trying to persuade FOS that the contract is unfair.

[unclebulgaria67]

When you start to put the FOS info together, i would suggest you look at ICOBS 5 & 6 in this link, plus also look at distance selling rules, as you bought the policy by phone.

 

https://www.handbook.fca.org.uk/handbook/ICOBS

 

5 is about identifying your needs i.e is the policy suitable. Unless you have significant savings in the Bank, having a policy with a debt obligation of up to £3k, is unlikely to be suitable. What happens if a Policyholder has 2 fault accidents within a short space of time ? Both claims mean a debt owed to XS Direct of over £5k bringing them above the threshold for Bankruptcy. No sufficient warning is offered about the potential debt consequences of taking out such a policy.

 

This is not a standard Car Insurance that was offered, as normally the Insurers fully cover liability to third parties with no excess. In the event of fault accidents, the financial consequence could be ruinous to many people. Yet no details are provided about how XS Direct would handle any debt owed to them and Insure your motor who sold the policy did not offer any alternative product that did not contain such a potentially financially damaging unusual feature.

 

You are going to sit down and start putting your thoughts together looking at the information you have. It is important you understand it.

[unclebulgaria67]

Jayden, you need to own this for your own good. Your comments to this thread evidence that you write very well and can easily write a letter. It will help you, as you may need to do this in future.

 

I have already written quite lengthy posts covering various points. I am sure you could copy and paste some parts of comments into a letter. I would not start writting letters for people on an internet forum such as this and payment would not be allowed anyway.

 

I am sure Surfer was trying to be helpful, but you can't take over a claim for Insurers and start taking on greater liability, taking out loans etc. What would be the point of insurance. Bad enough having taken out a £3k all sections excess policy.

 

Start to put something together and post it here for comment.

[unclebulgaria67]

So Surfer, do you know that XS Direct charge interest on a repayment arrangement ?

 

This info is not known and if you have this info it would be a major part of this FOS complaint.

[unclebulgaria67]

I did use the word "may" as I do not know. It seems common that when there is a payment scheme with an insurance company the APR is close to 28%. Either way the OP has to pay the £3K and a loan may be cheaper. There is also a possibility that the OP could then be locked into the insurance company at renewal time as they are paying off the £3K. Rather safe than sorry. The OP if they are going to have a repayment scheme with the insurance company need to establish the APR, the term and whether they would be locked in at renewal time.

 

We should stick to what is definite. Yes Insurers charge for monthly instalments relating to premium payment, but that information is given upfront. This thread is about a third party liability excess of £3k that XS Direct expect as a lump sum immediately with no repayment plan.

 

The FOS complaint needs to be addressed first and if the FOS don't uphold it, then that is when options about repayment would have to be looked at

[unclebulgaria67]

My renewal is available end of this month but the my policy is finished end of June.

 

At this point in time I would be unable to get any loan for less APR than 28% anyways due to other financial responsibilities I have at the moment (Currently repaying a loan etc).

 

You state one way or another I will have to repay it, What if the FOS deem my argument valid? Not the most encouraging thing to hear.

 

Don't worry about this. Get your FOS complaint written using info you already have.

 

Surfer cannot be right that XS Direct can start loaning the XS money at interest, because as far as i know this was never part of the Insurance contract.

 

The whole point of the FOS complaint is that Policyholders are being placed into a debt obligation they might not be able to service, just by having an accident. Yet neither Insure your motor or XS Direct looked into your finances.

[unclebulgaria67]

Page 20

 

https://www.onecalldirect.co.uk/existingCustomers/website-documents/getDocument.php?doc_name=1488541941Motor-XSD-Insurance-Policy-Wording.pdf

 

I can't open that PDF.

 

Can you copy/paste please

[unclebulgaria67]

Found it on Insure your motor site

 

The Excess applies to damage or injury claimed by a third party. You are liable for any claim (by You or any third party) made on Your Policy up to an amount of the value of the Excess on the Policy.

 

 

For example, if You are involved in an incident where a third party makes a claim against You and there is no damage to Your Car, You will be liable to pay The Underwriters the amount up to the value of Your Excess.

 

 

If You are deemed liable for any such claims, The Underwriters will make payments on Your behalf to settle the claim on the best terms available as outlined in Condition 1 of Your Policy.

 

 

It is therefore imperative and in Your interest to cooperate fully with XS Direct in settling any claim to allow every opportunity to reduce the claim’s cost.

 

 

When the Underwriters make payments to settle such claims on Your Policy,

We will send a letter informing You of the payments made and request payment up to the Excess amount within 14 days of the date the letter is issued.

In the event payment is not received within that 14 day period, We or the Underwriters reserve the right to immediately invoke the cancellation clause on Your Policy and Your Policy will be cancelled after a further 7 days.

Any legitimate claim submitted by You and/ or a third party prior to the cancellation of this Policy will be dealt with under the terms and conditions of this Policy.

 

 

In circumstances where the Excess payment due has not been received, and Your Policy has been cancelled by Us or The Underwriters for this reason, or when Your Policy has lapsed or has been previously cancelled but the Excess payment remains outstanding, the matter will be passed automatically to XS Direct’s debt collection agency with instruction to recover the amount due. Failure to pay the Excess due, within the allocated time frame will incur further charges which are outlined. As outlined in condition1 (f) (iii), the Company can conduct the defence, admit negligence for any incident or claim on Your behalf.

 

Consequences of failure to pay/repay the

Excess Amount

In the event of failure to pay/repay the Excess amount:

(a) The Policyholder shall indemnify the Company from and against all costs and disbursements incurred by the Company in pursuing the debt including costs of a solicitor and the Company’s debt collection agency costs.

(b) At the Underwriters option, both we and they shall be entitled to immediately invoke the cancellation clause on Your Policy and Your Policy will be cancelled after a further 7 days, although any legitimate claim arising prior to the cancellation of this Policy will be dealt with.

We would like to highlight some of the potential implications of having Your motor insurance Policy cancelled:

(a) You will NOT be insured to drive Your Car.

(b) Your Car’s registration will be removed from the Motor Insurance Database and You may be stopped by police.

© This cancellation must be disclosed in future motor insurance proposals which may affect the price and availability of Your future motor insurance.

(d) You will not be entitled to any refund on premium paid and You will continue to be liable for any instalments outstanding relating to the purchase of Your Policy.

(e) We may retain a record of Your claim history and cancellation in accordance with the Data Protection Act and may share certain information with other insurers and interested parties, where necessary and appropriate.

(f) We will pass this matter over to Our debt collection agents with instructions to recover the amount due, as well as any costs incurred in doing so. Failure to pay within the above allocated time frame will incur further charges which are outlined above.