Insurance deducted from payout?

[MarkHev]

Due to a car cutting me up then braking I swerved whilst braking and clipped an Audi TT this morning. The Audi suffered minor scuffs to the rear bumper whilst the bonnet of my 13 year old Scenic crumpled a few inches and the drivers head lamp cracked.

 

The car that suddenly changed lanes and braked causing me to swerve did not stop.

 

I assumed responsibility and called my insurer. I explained the situation and the contact centre call handler - who was very nice and calming - advised me that I should consider claiming on the car as a write off. "With the other guy claiming you may as well - whether you are liable for £10 or £1000 it won't make a difference and your premium will rise the same amount next time as there will be a mark against you"

 

I said I didn't want to do this unless necessary as I was attached to it and it was a great runner. I could myself replace the bonnet and lights from a breakers.

 

However, at lunch time I examined the car and found that what I thought was superficial damage was a little more involved and teh lights were pushed in. It was amazing that a tiny scuff on the Audi had resulted in my car looking like it had hit a wall.

 

I called the number I was given to speak to the claims team. I was advised that an inspector would call out to me within 48 hours.

 

To clarify I have only just swapped insurers and I pay monthly DD.

 

After the call, I received an email along the lines of "What happens next?"

 

This quoted paragraph worries me - should I withdraw the claim and simply repair the car myself?

 

Payment - as soon as we agree settlement and the vehicle documents have been verified, payment will be sent by cheque by first class post. If you pay your premium by instalments the outstanding balance may be deducted. In addition if there is finance outstanding, settlement will be sent to the finance company directly with any remaining settlement sent to you.

[BRIGADIER2JCS]

Yes the balance of the premium remains payable, most car insurance deals involving 'instalments are credit agreements and the credit provider has paid the insurer the full premium up front on your behalf.

[crem]

as Brigadier says it is payable, however... as the monthly installments are being made under a credit facility, I believe you should be entitled to a rebate (of part of the interest element) for "early settlement" just as you would be if you paid a bank loan or car loan off early.

 

I bet they forget to do that but perhaps you will need to remind them.

[BRIGADIER2JCS]

IT would be entirely dependant on the terms of the agreement, very many of these instalment plans are clear that the whole of the remaining balance of the premium must be paid, because the insurer has been paid in full by the credit provider who does not refund any payment to the credit provider.

[crem]

Yes, the insurance premium is payable in full. However, there is an interest charge payable to the credit company over and above the insurance cost itself for providing the credit facility. This element should be subject to the normal early settelment rules as applied to banks etc.

[BRIGADIER2JCS]

A section from an agreement relating to motor insurance paid by credit provider:

 

'if monies become payable by the insurer we shall be entitled to receive them from the insurer on your behalf, and to give good discharge thereof. We shall be entitled to KEEP the monies paid by the insurer for the satisfaction of payment of ANY instalments due, and/or any other payments payable or due under this agreement.

[Dave Briggs]

I cannot believe the advice about it being 10 or a grand, just shows how shocking the industry has got - just get your new car and keep your policy going but change the details..

[Kiki1]

I cannot believe the advice about it being 10 or a grand, just shows how shocking the industry has got - just get your new car and keep your policy going but change the details..

 

How else could the vultures guarantee their food supply ?

[SuperVillain]

I cannot believe the advice about it being 10 or a grand, just shows how shocking the industry has got - just get your new car and keep your policy going but change the details..

 

I think the advice about the values is correct because the value of the accident has no bearing on the risk which is why the premium goes up.

 

I could drive into the back of a 10 year old Corsa making the bumper fall off... the other car would likely be a write off and the claim against me probably around £3000.

 

Exactly the same accident but the car I hit is a Ferrari, I could have a claim against me for upwards of £30,000...(hire alone would be over £600/day and the car would be repairable)

 

So whether £3k or £30k the basis for the risk is still the same.