Car insurance claim void.

[Pliny the Penuriosus]

RE24 You are not the keeper of a company car the company is. A company car can be removed from you, by the company, at any time.

 

In the case of HP you are the keeper as it is your intention to pay the transfer fee at the end of the contract. In the case of leasing you have the opportunity to purchase it at whatever balloon payment was agreed at the outset but you don't have to. You can return it

[xrchris]

RE24 You are not the keeper of a company car the company is. A company car can be removed from you, by the company, at any time.

 

In the case of HP you are the keeper as it is your intention to pay the transfer fee at the end of the contract. In the case of leasing you have the opportunity to purchase it at whatever balloon payment was agreed at the outset but you don't have to. You can return it

 

Perhaps it would be better to discuss this in a new thread rather than hijack the current one as this is getting away from the OP's problem a bit now.

[Pliny the Penuriosus]

Agreed 27

 

Suffice to say the OP has a perfectly valid claim & the insurance company should never have rejected it

[xrchris]

To me it appears they are rejecting the claim on the basis of the Policyholder 'fronting' for their son. The fact that the vehicle is registered in the the sons name and was bought on HP by the son would on face value appear to support that conclusion.

 

It is these points that need to be clarified with the insurer.

 

Perhaps ask the insurer for a full written explanation (if one hasn't yet been given) as to why the claim has been refused so you can proceed from there?

[Pat-Uk]

And now back to the OP

 

You are in a very awkward position, you may be lucky if you have a nice Ins Co, as already mentioned they may be prepared for you to pay the additional premium for your son to be the main Policy holder from the start of the policy.

 

The problem you may have is that it could appear to an insurance Co that you made a deliberate attempt to pay less for your sons insurance by having him as a named driver rather starting his own policy for his own car, they might argue that the car was on Finance by your son, the may even be a HP agreement in his name, so there would be no real argument as to who the owner really is.

 

I honestly think your best bet would be to come clean partly, but blame naivety as your excuse, definitely don't stay with the story that it was your car and that your son was not the main driver unless you can prove otherwise (Son at UNI full time and car kept at your home type thing).

 

You may find as already mentioned that the FOS threat will be the best solution, this may also work in your favour as the FOS do allow for naivety, if you can show you did not intentionally try to defraud the Ins Co, it was just a silly mistake and you believed what you were doing was allowed then you may get a ruling in your favour. FOS case history would be a great place to start looking, I remember a case when I was looking through a year or so ago, not to dis-similar to yours where it went in the customers favour. (i've had a really nasty experience with Directline insurance and lost everything after a fire so did a huge amount of research on insurance law and the implications of their T&C)

 

It would also be worth your while now to find out the difference in policy costs to see how much money they have lost out on as a result of insuring your sons car the way you did.

 

One other thing is that has not been mentioned is that some Finance companies insist that the car is insured, you might find your son is in Hot water over this (sorry) but you should really check the situation on this.

 

Hope this helps a bit

[Pliny the Penuriosus]

It doesn't matter as long as the son was covered on the insurance if he was using it at the time therefore the premuim would be the same.

 

Premuims are calculated on the least qualified user who's seen as the greatest risk

[xrchris]

It doesn't matter as long as the son was covered on the insurance if he was using it at the time therefore the premuim would be the same.

 

Premuims are calculated on the least qualified user who's seen as the greatest risk

 

That isnt strictly true.

 

If a policyholder had one vehicle in the household and was also the declared main user (not their younger offspring) then (generally) there would be a lower premium quoted than if there were 2 vehicles in the household and/or their younger offspring were the declared main user.

[patian47]

The insurers have not queried or refused claim due to the finance in our sons name, as we assumed like another thread, that it is the finance co,untill the agreed payment is made and then our son becomes owner. Anyway, it has been soley refused on (MR) my husband not being , registered keeper, as on the brokers file it states that (Mrs) myself, is keeper. What we are trying to ascertain, if as A legal team have stated that this is just technical and should be pursued as, the driver who used the car last is fully entitled to, as named driver on our fully comp cover. And we have always has named drivers on my husband policy as HE IS THE MAIN DRIVER and the others use occassionly, so why would anyone pay for their own policy when this is the case? I rang broker M&S and have not had any call back,although when I rang them again, a note was on file that on our behalf a call has been made to CIS. Today received a letter direct from CIS saying Sorry for your inconvenience and that you felt you had to complain as your policy was rejected and made void. We will reveiw the report from our assessors Cunningham & Lindsey and make enquiries. Should an agreeable solution not be found , you will then be able to refer to FSO. I sent copies of letters received and complaint in writing direct to M&S as suggested by the legal team ( free) entitlement to do so as they are our brokers. So will keep you posted,it could be weeks, thankyou all for an insight to a complicated issue.

[patdavies]

Anyway, it has been soley refused on (MR) my husband not being , registered keeper, as on the brokers file it states that (Mrs) myself, is keeper.

 

You should be aware that there is a world of difference in law between keeper and registered keeper. Any insurance company should know this.

[patian47]

How are we to know what the difference is, when there does seem to be difference of opinions in all these threads! What does the insurance want you to answer too, keeper or reg keeper, what is the difference?

[Darkangelsdelite]

Can answer 1 part of this for you. The registered owner/keeper of the vehicle must have the insurance in their name. As the car "technically" belongs to your son (V5 docs in his name) any insurance payout should be payable to him. Was your son the main driver of the vehicle? If so was he named as such on the policy? If not then the insurance company could invalidate the claim on the basis of misrepresentation. Its something all the insurance companies are clamping down on. More commonly known as "fronting" people are insuring their sons/daughters vehicles in their own name and putting them on as named drivers to keep the cost down and most dont realise the impact until trying to claim.

 

Please dont take this as accusational, just trying to understand a little background into possible reasons why the would reject the claim.

 

Just adding my opinion here, i agree with the above, sounds like a straight forward fronted risk case.

If the car is registered to the son (i.e V5 in his name) and he is the owner of the car (the finance is in his name) then the insurance should have also been put in his name. Presumably he's only ever been a named driver so isn't probably entitled to his own NCD hence why the policy ended up in the dads name cos he probably has. I have to side with the underwriters on this one and decline the claim based on non-disclosure.

Be interested to see how this one turns out cos there appears to be a lot of different opinions on here.

 

DA.

[Trojan1401]

Following on from DarkAngel whose comments I fully agree with, there are two main principles / points here which upholds the Insurer's perspective ;-

 

1. Insurable Interest.

 

The vehicle in question was bought(financed) by son and registered by him therefore the insurable interest lies soley with him. The policyholder does not have any financial interest in the car therefore the father cannot insure this in law. Similar principle applies if you were to try to take out life assurance on a celebrity for instance - you would have no financial/insurable interest hence this is not allowed.

 

2. Material Fact.

 

The owner/registerd keeper is relevent to an underwriter as confirms the above principle and allows an underwriter to asses the risk fully.

 

In all insurers, the proposer has a "Duty of Disclosure" of such material facts, the definition being " a material fact is information which will allow an underwriter to make a proper assesment of the risk to be insured and should be disclosed. This actually puts the onus on the proposer to disclose any information whether they think relevent or not. A statement to this effect would be on the original proposal / renewal invite / statement of facts etc when you took out the policy or renewed/adjusted it.

 

In this particular instance, the Insurers are quite within their right to refuse indemnity and infact should void the policy from inception (or from date of adjustment) and provide a full refund without any charges provided that a claim has not been paid out under the policy.

 

Apologies for the nagativity however these are the facts. However, on a positive note, when you contacted the broker/insurer to change the policy, you should have been asked who the owner/registered keeper was and on stating your son, this should've lead to a raft of other questions which would conclude that you son should take out a policy in his own name.

I suggest you therefore contact the broker & ask for a transcript of the conversation. Although in law the duty of disclosure would still apply, you could have a claim against the broker for not carrying out the correct procedures and asking the correct questions.

 

Unless the broker has not complied then unfortunately, I doubt that any complaint to the FSA or Insurance ombudsman would be upheld.

[Pliny the Penuriosus]

As a user the father does have an insurable interest. If the HP was disclosed & the correct level of premuim paid there are no grounds for refusing the claim. As we will discover in time

[bed32]

the correct level of premuim paid there are no grounds for refusing the claim. As we will discover in time

That's going to be the crux of the matter. If telling them the son was the registered keeper would have raised the premiums then the ins co are within their rights to avoid the policy, and FOS will back them - although there may still be a claim on the broker

[xrchris]

As a user the father does have an insurable interest.

 

Exactly, too many people seem to think that only the owner has insurable interest when in fact it is any person who stands to lose financially from not being insured. By financial it does not just mean the person(s) who paid/are paying for the car. But i am digressing a bit from the OP here.

 

I dont think that there is a valid reason to deny the claim as such (read the FSA's ICOB 7 for reasons not to avoid a claim for my reasoning on this) but there is a reason to avoid the policy ab initio due to the failure to declare material facts and thereby comply with utmost good faith. This appears to be the route being taken by the insurer which negates even having to discuss the claim.

 

Will be interesting to see how this progresses.

 

*Edit*

 

I forgot to add - Under industry code of practice, insurers agree not to avoid policies issued to private individuals where the innocent misrepresentation is in the nature of a technicality. This appears to be what the OP's Legal asst. co. appear to be pursuing on their behalf.

[Darcydog]

The father does not have any insurable interest in the car (the subject matter of insurance), the only loss the father may suffer is for being done for no insurance - completeing separate legal issue.

 

An individual has an insurable interest when he or she will obtain some type of financial benefit from the preservation of the subject matter, or will sustain pecuniary loss from its destruction or impairment when the risk insured against occurs.

 

In insurers eyes it's the ultimately the sons car, albeit on finance, who would have received the claims settlement cheque obviously. It simply should have been insured in sons name. Clear case of fronting, this very large material fact should have been disclosed, there is the question however, over whether M&S asked and would check transcript. Statement of fact/proposal form should have been checked to confirm all details correct though, generally not in particularly 'small print' either by the way....

[xrchris]

The father does not have any insurable interest in the car (the subject matter of insurance), the only loss the father may suffer is for being done for no insurance - completeing separate legal issue.

 

An individual has an insurable interest when he or she will obtain some type of financial benefit from the preservation of the subject matter, or will sustain pecuniary loss from its destruction or impairment when the risk insured against occurs.

 

I dont wish to start a quote war(so to speak) but you are not entirely correct.

 

As quoted in the Dictionary of Insurance.

Insurable interest

A principle of insurance whereby a policy is not valid unless the insured person stands to suffer a financial loss if the insured event occurs (e.g. loss or damage to property or creation of a liability), or benefit from the non-occurrence of the event, i.e. the property being preserved or no liability being created.

 

If the father is an authorised driver a liability is created each and every time he uses the vehicle and so therefore stands to sustain a financial loss should an insured event occur and so has an insurable interest.

From memory it also states this in the CII's IF5 study course unit.

[Pat-Uk]

Just another thought, If the father was a named guarantor of the HP or finance agreement, this may could then be viewed that the father had a financial interest in the vehicle, This may be a valid point of argument, as it was for his own financial security that the vehicle was insured in his own name, Although this may be totally irrelevant

 

The main thing here that seems to have been completely overlooked is that the car was registered in the mothers name, and this seemed to be the issue the underwriters have a problem with. I thought that Spouses were automatically insured ? if so, why should the fact that it was registered in the spouses name be an issue, especially as some policies ask/insist in their applications that the car be registered in either the policy holder or policy holders' spouses' name.

 

I think that it maybe time to ignore the son issue completely for the time being (it will no doubt be looked into later by the insurer) and concentrate on the actual reason the insurers have rejected the claim.

 

The above reason may well be valid justification to take the case to the Financial Ombudsman, as there is definatly no increase in risk with the car just being in the spouses name.

[xrchris]

 

The main thing here that seems to have been completely overlooked is that the car was registered in the mothers name, and this seemed to be the issue the underwriters have a problem with. I thought that Spouses were automatically insured ? if so, why should the fact that it was registered in the spouses name be an issue, especially as some policies ask/insist in their applications that the car be registered in either the policy holder or policy holders' spouses' name.

 

I thought that the OP had stated that the car was insured in Mr's name and was noted as Mrs (spouse) being the registered keeper and/or the owner but in reality it is actually registered, on V5, and also owned(most likely?) by the son.

[Darcydog]

Yes TP liability is created in common law against damage or injury to third parties, however, policy is not valid and therefore he is not insured, further, no insurable interest in the subject matter of insurance, in this case the theft of the vehicle, it is not the fathers car. Did father have some NCD by the way?? would like to know cost of policy in son's name.

 

An interesting point, had the car been written off in an accident and caused tp damages, insurers would have to settle as rta insurers but would then look to recover from responsible party, as when recovering from a thief...

[xrchris]

Not wishing to confuse anyone - I was being more general about insurable interest rather than specific to this case, but yes you are correct that in this particular claim no insurable interest existed for the father at the time of loss.

 

Anyway back to the OP......

[Pat-Uk]

But it seems to us that the problem that the CIS insurers are voiding it for is, keeper not policy holder, as they have that (MRS) is keeper, im not on this one, but on our old car policy,and actually our son is keeper.

 

I've Re Read (just me being a donut):

But this may now pass the blame (as previously mentioned) backto the broker, as they should have asked for the correct details and not just copied the details from the old policy.

[patian47]

For my husband only to insure , it was £200, pa. With adding our son , it is just under 1000. We have always had our son on our policy of ours since he was a learner at 17yr pased first time at 18yr. Our son is now 21yr, and only ever claimed for a window, infact it has been my husband who had a claim in feb for own fault, no other party involved.Anyway, I was as you have noted on the last policy, but changed the details to the new car, I am still down as reg keeper, I have asked the broker to send me a transcript of that time , they have requested that we return ins policy, and they will repay the premiums back,however we received a letter from CIS and they will review the report. We have kept up the monthly direct debit as requested to keep policy live, and we did receive legal assistance , they have said that this more a tech issue, than material fact. And maybe a compromise could be reached where any extra premium ( a result from our son being a named driver and not a policy holder) be deducted from the claim. We have been astounded at how many of you have replied and with some variations, opinions. We do think that owner/ keeper question when applying for a policy, should be clarified. As some one said OWNER, KEEPER and reg keeper are all different, How are we to know?. We do have an interest in the upkeep, we pay the policy premium and a sum towards the monthly finance in return for almost full use of the vehicle. Neither ourselves or our son could manage the whole total as individuals, this was a joint decision, although we were never asked to be guarantor on finance, it is our sons name. But the Insurers are not disputing that area, they just queried and refused claim on policy holder not being reg keeper.We will update you all soon.

[Pliny the Penuriosus]

For my husband only to insure , it was £200, pa. With adding our son , it is just under 1000. We have always had our son on our policy of ours since he was a learner at 17yr pased first time at 18yr. Our son is now 21yr, and only ever claimed for a window, infact it has been my husband who had a claim in feb for own fault, no other party involved.Anyway, I was as you have noted on the last policy, but changed the details to the new car, I am still down as reg keeper, I have asked the broker to send me a transcript of that time , they have requested that we return ins policy, and they will repay the premiums back,however we received a letter from CIS and they will review the report. We have kept up the monthly direct debit as requested to keep policy live, and we did receive legal assistance , they have said that this more a tech issue, than material fact. And maybe a compromise could be reached where any extra premium ( a result from our son being a named driver and not a policy holder) be deducted from the claim. We have been astounded at how many of you have replied and with some variations, opinions. We do think that owner/ keeper question when applying for a policy, should be clarified. As some one said OWNER, KEEPER and reg keeper are all different, How are we to know?. We do have an interest in the upkeep, we pay the policy premium and a sum towards the monthly finance in return for almost full use of the vehicle. Neither ourselves or our son could manage the whole total as individuals, this was a joint decision, although we were never asked to be guarantor on finance, it is our sons name. But the Insurers are not disputing that area, they just queried and refused claim on policy holder not being reg keeper.We will update you all soon.

 

For "it's a tech issue" read "we don't have a clue what we are talking about"

 

Having been down this road on a number of occasions and provided there was no attempt to defraud the insurer by paying a lower premuim you have a valid claim in tort. They like many insurers are just trying it on.

 

Suggest you see a solicitor who understands Law of Contract they'll sort it for you

[patian47]

Chasing up CIS , they are still waiting for report/ findings from the underwriters, who are waiting in turn for the broker M&S. Gave me a NOT HOPEFUL outcome although the tone of voice from the chap at CIS was hesitiant and tried to go around and make excuse for anything I chose to ask him or bring to his attention. I told him that I had requested M&S to send transcript or paperwork to do with the day that I changed the details on our policy and that I had heard nothing, he was not bothered, I said that we had received a letter from CIS to ask us to snd back the insurance certifcate but had also had request from M&S to do the same, what should we do, he said perhaps you should send it to M&S as they issued it, I rang M&S and they said send it to CIS as they the insurers? makes me wonder if they really understand the job they are doing.So we have it here. The Cis chap wasnt familiar with our case although he has been the same chap dealing with it ,I has to explain to him that this is an old policy that was changed midway, and not a new policy taken out for that vehicle and perhaps this can go someway to help explain the problem / error of reg keeper. He said i should have been asked the following when changing details"is the vehicle registered with the licensing authority in you name" to which I supposedly said yes ?. I told him that I was not asked that phase and in that sentence. I was asked owner/ keeper. He said oh well you still said yes. But I said to him, that is not correct as OWNER and KEEPER are two different things arnt they?, he hummed and did not really have any answer but just babbled on. So I think that if they still refuse our claim we will have to get a solicitor involved.