Mrs F had an own-fault accident* in her Colt earlier this year requiring bodywork repairs done under her insurance. She's cancelled the policy now that we've sold the car and she's covered under my company car policy.
She was paying in monthly instalments, and she's been told by the company (Prudential) that, despite the cancellation, due to the claim she has to keep on paying the full monthly amount for the rest of the policy year.
I suspected this would happen so wasn't surprised, but can someone confirm that they are entitled to do this?
*well it was the wall's fault really
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Firstly you are not paying for monthly insurance. You are taking out a 12 month policy and as a separate arrangement paying for it monthly.
Without a claim I would expect the process to be;
Annual Premium £240
cancelling after 6 months
Short period rates means only 25% returnable.
Paying at £20 per month
So at cancellation point £60 still owed to insurance company.
With a total loss claim then definitely there would be no return premium.
With a payment, but not total loss it could go either way. I'd say it was worth a foot stamp, but you don't really have much in the way of rights.
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Thanks Mark - I was hoping you'd chip in :)
>> Firstly you are not paying for monthly insurance. You are taking out a 12 month
>> policy and as a separate arrangement paying for it monthly.
In their words we've taken out a loan for the cost of the policy.
>> With a total loss claim then definitely there would be no return premium.
FWIW the cost of repairs was more than what we sold the car for.
>> With a payment, but not total loss it could go either way. I'd say it
>> was worth a foot stamp, but you don't really have much in the way of
>> rights.
Might try giving them a call; thanks again.
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>> FWIW the cost of repairs was more than what we sold the car for.
>>
Bit o/t. but was there any reason given for not writing it off?
Oddly (as it was also a Colt) some friends of ours had their's repaired after a hefty T-bone incident and absolutely everyone who looked at the car said it was a write off apart from the 3rd parties insurers.
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>> >> FWIW the cost of repairs was more than what we sold the car for.
>>
>> Bit o/t. but was there any reason given for not writing it off?
Don't think so - perhaps the price on the repair paperwork wasn't what the insurance company paid? And it was only side panels, not chassis - Mrs F had no problem driving it home after the prang. Dunno.
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>> And it was only side panels, not chassis
Ok, I know - it's a monocoque :)
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All a bit grey, as No FM implies -
www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm
The 'interesting' part of your experience is that they are saying you would have had a refund but for the claim. That seems a bit cheeky; the policy did not end, as it would have done with a total loss. They might however have some weasely logic that says the risk they have run since the accident has actually been higher (that is obliquely referred to in the Ombudsman piece above).
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>> That seems a bit cheeky
...but I guess we agreed to it, as shown in Dave's link.
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I have always understood that when you take out the insurance it is for a year.
Installments just spread the pain.
If you cancel then I understand ( like a lump sum payment ) you may get a refund less admin charges.
If you claim during the year then no refund and finish paying the premium. balance
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>> can someone confirm that they are entitled to do this?
www.pru.co.uk/pdf/WEBM11071_PRUMSPB.PDF
5b Cancellation by you
We will not refund any premium if you have made a claim or if one has been made against you during the period of cover. If you have made a claim, or one has been made against you, the balance of the year’s premium will become payable.
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>> www.pru.co.uk/pdf/WEBM11071_PRUMSPB.PDF
Thanks Dave - should have found that myself.
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>> >> www.pru.co.uk/pdf/WEBM11071_PRUMSPB.PDF
>>
>> Thanks Dave - should have found that myself.
The Ombudsman's view seems to be that if that is not a 'negotiated' term it could be unfair - depending on how much is involved.
If you have time on your hands and it's a meaningful amount you could complain to them, and threaten to make a complaint to the Ombudsman. IIRC they have to pay a fee of £500 to the ombudsman win or lose. That has probably gone up - it is estimated and set to recover the costs of running the ombudsman service. Plenty of PPI claims from the undeserving have been settled that way as a commercial decision by the seller.
E&OE.
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>> If you have time on your hands and it's a meaningful amount you could complain
>> to them
Useful info, cheers - I'll discuss with herself.
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As I said, not much in the way of rights, but worth a foot stamp.
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>> As I said, not much in the way of rights, but worth a foot stamp.
Yes. Didn't disagree at all. I had a feeling in the back of my mind that pro rata refunds might have become more or less mandatory at some point for general insurance so I checked, but that is not the case. I was thinking of the Competition and Markets Authority order that mandated such refunds on extended warranties lasting over one year.
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>> Didn't disagree at all.
Just for the avoidance....
I didn't feel that you had disagreed, I was intending to emphasise what you had said.
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Another insurance - cancelling after claim - No FM2R
