Voided Insurance and left in Debt - XS DIRECT

[VB92]

This company has caused me nothing but trouble and put me in the worst financial difficulty.

 

I was a named driver on a car i got for my brother. I had a seriously bad accident which was not my fault. (HIT AND RUN by stolen car)

 

 I made a claim and the company took 7 weeks to make a decision to void the insurance due to the V5 being in my name (the named driver) instead of my brothers name (the main driver).

 

This was an unintentional accident made when setting up the insurance and the company were not interest in the trouble this had caused us at all. Rude staff and no understanding for their customers.

 

 now they are inquiring charges for storage of the vehicle when they had taken 7 weeks to make the decision to void.

 

This company will do everything in its power to not support their customers and get out of paying any claim. 

 

Can you please advice on what to do next? 

Edited January 5, 2022 by dx100uk
added A few blank lines only..dx

[unclebulgaria67]

Contact Motor Insurers Bureau to see what help they can provide in regard to the accident claim.

 

https://www.mib.org.uk/

 

https://www.mib.org.uk/making-a-claim/claiming-against-an-untraced-driver/

 

The Insurers are XS Direct would be entitled to void the policy, if the policyholder did not have insurable interest as it was not their car.

 

Article on Car Insurance fronting

 

What are the consequences of car insurance fronting? - Confused.com

WWW.CONFUSED.COM

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Car insurance fronting is a tactic used by some to save some money on their policy. But it's illegal.

 

 

 

 

[VB92]

Thanks for your quick response. Do you think I have a right to go through FOS? 
 

Thanks 

[unclebulgaria67]

No, only the policyholder has the right to go to the FOS, but they are mostly likely to support the Insurers decision.

[BazzaS]

It was a car "you got for your brother", but the details matter.

 

Was your brother the owner? The keeper? or neither but 'just' the main driver?.

Owner and keeper are often the same person, but don't have to be, nor do either keeper or owner have to be the main driver ....... (they could be 3 different individuals, but that would likely need some explaining to the insurers!)

 

Who was the policyholder? whose account did the payment(s) come from?  ....... You said "you" made a claim (rather than "my brother made a claim")

 

If you bought it, you paid for it, you were registered as the keeper, you took out the policy (and paid it!) but you let your brother use it (and correctly declared him as the main driver), then you have an insurable interest in the vehicle (ask the question "who suffers the financial loss when the vehicle is written off, you or your brother?".

If your brother is without a vehicle, but you are the one out of pocket, then it is you who has suffered the loss, and who held an insurable interest.

 

If you gave it to your brother, such that he was the owner, and he was the policyholder (and he made the policy payments!), then he has the insurable interest.

You paid for it, but the insurable interest passed to your brother when your gifted it to him.

You then need to persuade the insurance company that you were the keeper ONLY, once you gifted it to him, and he held the insurable interest (remembering that the Owner and keeper don't have to be same person).

 

Imagine the scenario where parents buy a car for their 18-year old student child to drive. The parent is the owner, the keeper, pays the policy premium and hold the insurable interest. The child is the main driver. If the parent insures it with the child correctly listed as the main driver, and the parent as a named driver, the policy wouldn't be 'fronted'. (and would likely have a higher premium than if the parent lists themselves as the main driver). However, in the event of loss, the parents interest is protected by the policy not being fronted / dishonest.

 

Similar scenario, but the parent GIFTS the car to the student, who pays the premium. The child holds the insurable interest, regardless of if the parent is still shown as the Keeper. (it is more common to have the owner as the keeper, but it doesn't have to be so!).

 

Just because this is 'brother and brother' rather than 'parent and child', the same should still apply (but expressing it as parent and child may be a scenario the insurer is more used to if you have to explain it to them!).

 

Where you go from here depends on the answers to the above questions (as well as what you've stated to the insurers! ... provided all match up, you have a way forward....

However, if you haven't been honest with the insurers [especially if this could be seen as 'fronting', where the insured party gets a cheaper quote than the real owner], then you may well struggle).

 

UB is more knowledgeable than me regarding insurance, but (for the reasons I've stated), the situation might be more promising than he has concluded (though, the details might reveal things to be as dire as he has predicted!)

Edited January 6, 2022 by BazzaS

[BankFodder]

I think it would be helpful if you gave us some information about the profile of both you and your brother.

 

This means age, how many years you have held a driving licence, previous accident record, ever been refused insurance, driving convictions.

 

This will help us form our own impression of the circumstances of the insurance policy and the arrangement between you and your brother.

 

[Manxman in exile]

It might also be useful to know why you bought a car for your brother?  It's not a very common choice of gift.

 

(Which is not to say that you could not have had a good reason for doing so.  eg coming of age present; wedding present; you have much more money than him; etc)

Edited January 6, 2022 by Manxman in exile

[unclebulgaria67]

I did consider the ownership question, but this is difficult to prove after the event.

 

Seen many similar situations, where one family member buys a car, registers themselves with DVLA as the keeper,  but then apparently gifts the car to another family member who takes out the Insurance. 

 

Why in these cases is it that the registered keeper who apparently is no longer the owner is the one who has the accident.   Then as the named driver on their family members policy they make the claim.

 

When the policy was taken out by the Brother they would have been asked whether they were registered keeper and main driver. Appears the Insurers were given answers to questions which were not true and therefore they are entitled to void. The Insurers have decided this was not careless, but a deliberate act to take out Insurance on a basis that was known to be incorrect.