Problem with Insurance policy

littlerose2

Hi, I was wondering if anyone could help - my friend has asked me to post here as she isn't on Boards.

She recently purchased a motor policy with a major insurance company. They received her recent driver's experience and have sent her a letter saying that she owes them €400, as she was a month under the minimum driving experience required for the paid amount of the original policy. They also said that it cannot count because her driving exp. wasn't all at once. Would she be better to cancel the policy now and go to a different insurer?

This has turned me off going to this company for insurance...

dudara

Moved to Banking & Insurance & Pensions

dudara

whomitconcerns

unfortunately your friend didnt give them correct data....so based on the data being correct she owes them money. Not really much you can do here...all ins companies quote based on the facts you present them based on the definitions they provide you

hucklebuck

Every insurance contract is based on utmost good faith ( http://en.m.wikipedia.org/wiki/Uberrima_fides). The insurance company could just void the cover and keep the premium and you better hope no claims arise. If the policy is cancelled then you have to tell your next insurer or it could happen again.

All Insurers seek proof of continuous driving experience, even a days gap can reset the years earned and thus increase the premium

oldyouth

hucklebuck wrote: »

Every insurance contract is based on utmost good faith ( http://en.m.wikipedia.org/wiki/Uberrima_fides). The insurance company could just void the cover and keep the premium and you better hope no claims arise. If the policy is cancelled then you have to tell your next insurer or it could happen again.

All Insurers seek proof of continuous driving experience, even a days gap can reset the years earned and thus increase the premium

If an insurer voids the policy, they cannot keep the premium.

OP, the wrong information was given to the insurer and the additional premium is due. If the facts are that the driving experience is not continuous, then all other insurers will take the same approach when it comes to discounts. It is an industry standard practice

strokeslover

Yeah unfortunately if the incorrect info was given she would owe them the extra premium, If the gap was at max a week or two, some Insurance companies would agree to allow the Driving Experience.
When I worked in a brokers the underwriters we dealt with told me it was decided on an individual basis. But a gap of a month is too long.

hucklebuck

oldyouth wrote: »

If an insurer voids the policy, they cannot keep the premium.

They can and they do, refunding premium is at their discretion where the information was incorrect. In serious cases they can also recover any claims paid from inception to discovery of the breach/ when they decided to void.

littlerose2

Thanks for the information everyone, I will pass it on. It was a genuine mistake, it was because her driving was all spaced out that she thought it was a full year of experience that she had.

hucklebuck

littlerose2 wrote: »

Thanks for the information everyone, I will pass it on. It was a genuine mistake, it was because her driving was all spaced out that she thought it was a full year of experience that she had.

One other problem she may have though if she cancels they may apply short period rates so tell her to check before cancelling as if they apply short period rates she may only get 30% back and it would outweigh any benefit of cheaper quote elsewhere.

Best thing to do would be to find out the refund if she cancels from x date and get quotes from other companies for a policy commencing on x date this way there is no guess work involved.

Good luck, if you need more info feel free to pm me.

oldyouth

hucklebuck wrote: »

They can and they do, refunding premium is at their discretion where the information was incorrect. In serious cases they can also recover any claims paid from inception to discovery of the breach/ when they decided to void.

If an insurer voids a claim, it is deemed to be cancelled "ab initio" (from inception, as if the policy never existed). For an insurer to exercise this right, he must refund the premium. If a broker has arranged the policy with the insurer, the broker may be in a position to retain some or all of their fee

hucklebuck

oldyouth wrote: »

If an insurer voids a claim, it is deemed to be cancelled "ab initio" (from inception, as if the policy never existed). For an insurer to exercise this right, he must refund the premium. If a broker has arranged the policy with the insurer, the broker may be in a position to retain some or all of their fee

If you don't have a rashers what you are talking about you should not contradict someone who does with made up information.

Uberrimae fidea(utmost good faith) is the foundation of the contractual agreement made between insured and insurer and that is why breaches of it can result in policies being voided.

While you know the term an initio I would suggest you start learning at the beginning.

The actions insurers will take are stated in most policy wordings.

big syke

oldyouth wrote: »

If an insurer voids a claim

Do you mean void the policy???

oldyouth wrote: »

For an insurer to exercise this right, he must refund the premium.

Not true. It all depends on the policy wording and how long the insured has been on cover for and as mentioned above most insurers will retain an amount of the premium. This is all stated in the policy documents.

oldyouth

hucklebuck wrote: »

If you don't have a rashers what you are talking about you should not contradict someone who does with made up information.

Uberrimae fidea(utmost good faith) is the foundation of the contractual agreement made between insured and insurer and that is why breaches of it can result in policies being voided.

While you know the term an initio I would suggest you start learning at the beginning.

The actions insurers will take are stated in most policy wordings.

You're wrong on so many levels I don't know where to begin. Firstly, if a policy is 'voided', it is treated as if it didn't exist. Insurers are obliged to refund the premium. If they cancel it during the period of insurance, they have rights to retain all or a portion of the premium depending on their wording. Insurers often void a policy to protect themselves from being involved in a claim if one gets subsequently notified to them. If they have accepted any part of the premium, they have no defence in refusing indemnity.

Breach of Utmost Good Faith is just ONE of the reasons that insurers can void a policy, there are many.

It's 'Ab Initio', like I stated, not An Initio. Learn you insurance terms before getting on a high horse

hucklebuck

oldyouth wrote: »

hucklebuck wrote: »

If you don't have a rashers what you are talking about you should not contradict someone who does with made up information.

Uberrimae fidea(utmost good faith) is the foundation of the contractual agreement made between insured and insurer and that is why breaches of it can result in policies being voided.

While you know the term an initio I would suggest you start learning at the beginning.

The actions insurers will take are stated in most policy wordings.

You're wrong on so many levels I don't know where to begin. Firstly, if a policy is 'voided', it is treated as if it didn't exist. Insurers are obliged to refund the premium. If they cancel it during the period of insurance, they have rights to retain all or a portion of the premium depending on their wording. Insurers often void a policy to protect themselves from being involved in a claim if one gets subsequently notified to them. If they have accepted any part of the premium, they have no defence in refusing indemnity.

Breach of Utmost Good Faith is just ONE of the reasons that insurers can void a policy, there are many.

It's 'Ab Initio', like I stated, not An Initio. Learn you insurance terms before getting on a high horse

Rough translation "waffle, waffle and more waffle"

Still haven't found a policy document then I take it or maybe you just can't read.

Clearly I hit the n beside the b on my phone keypad.

There is an awful whiff of a personal lines handler coming from you.

I would love to hear the "many" reason for insurers to void a policy - LMAO

oldyouth

hucklebuck wrote: »

Rough translation "waffle, waffle and more waffle"

Still haven't found a policy document then I take it or maybe you just can't read.

Clearly I hit the n beside the b on my phone keypad.

There is an awful whiff of a personal lines handler coming from you.

I would love to hear the "many" reason for insurers to void a policy - LMAO

Is an explanation from Lloyds good enough for you regarding cancellation from inception (ab initio) and the returning of the premium

http://www.lloyds.com/Common/Help/Glossary?page=2

You're mixing up the cancellation clause on an insurance contract where insurers admit cover is in place until such time as they wish to end the contract, for whatever reason

BTW, 33 years Commercial Insurance experience

hucklebuck

oldyouth wrote: »

Is an explanation from Lloyds good enough for you regarding cancellation from inception (ab initio) and the returning of the premium

http://www.lloyds.com/Common/Help/Glossary?page=2

You're mixing up the cancellation clause on an insurance contract where insurers admit cover is in place until such time as they wish to end the contract, for whatever reason

BTW, 33 years Commercial Insurance experience

That is a definition of the cancellation clause and it clearly states cancel a contract before it is due to expire, if a policy is voided there is no expiry date as it is treated as it was never in force. Cancellation clauses are normally triggered in Lloyd's if a premium payment condition is breached.

As we are talking misreprensentation on motor I refer you to page 12 of the axa motor policy:

* we will not pay a claim
* we may declare the policy void
* we will be entitled to recover from you the amount of any claim we have already paid
* we will not return the premium

BTW, 5 years personal lines broker, 7 years commercial broker, 3 years insurance/ reinsurance underwriter & broker auditor

oldyouth

You're looking in the wrong place

Avoidance of a contract ab initio
The cancellation of an insurance or reinsurance contract from its beginning by an insurer or reinsurer on the basis of the misrepresentation and/or non-disclosure of material facts. The result is that the insurer/reinsurer has no liability under the contract but must repay the premium to the insured/reassured.

I'm done here

hucklebuck

oldyouth wrote: »

You're looking in the wrong place

Avoidance of a contract ab initio
The cancellation of an insurance or reinsurance contract from its beginning by an insurer or reinsurer on the basis of the misrepresentation and/or non-disclosure of material facts. The result is that the insurer/reinsurer has no liability under the contract but must repay the premium to the insured/reassured.

I'm done here

You are in the wrong place, you are looking at Lloyd's definitions yet the OP stated a major insurance company.

The contract with an insurance company is the schedule and policy document, even if the major insurer has resinsurance through a Lloyd's syndicate the reinsurance would have a follow the fortunes clause which does not affect the underlying policies.

Axa are a major insurer and I had a copy policy to hand and it clearly states that they will not return the premium.

oldyouth

So Lloyds aren't a major insurer ?????

I'm really done here now. I wonder what's on the telly?

hucklebuck

oldyouth wrote: »

So Lloyds aren't a major insurer ?????

I'm really done here now. I wonder what's on the telly?

No, Lloyd's is an underwriting agency with hundreds of syndicates who are the insurers. Examples of Lloyds agencies are JR Clare and Catalina

Lol @ 33 years experience, you think Lloyd's write to individual policyholders that they have no relationship with?