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car insurance claim!

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  • car insurance claim!

    A friend of mine took out fully comp insurance last month, unluckily he had a crash and the car was written off. The insurance was spread over ten payments. Only one payment was made. The car was valued at £800, the insurers are demanding he pays the £1200 outstanding of his premiums. He has said he wont make a claim if they wipe off the outstanding payments, they are saying he has to pay. Where does he stand legally?

    Thanks for reading,

    Best wishes,
    Hod..Liam..
    Borrow money from a pessimist -- they don't expect it back.

  • #2
    Re: car insurance claim!

    Same thing happened to me a few years ago when my XR3 was stolen. They didn't even tell me, just took the remaining payments off the payout and sent me the balance. Argued the toss but got absolutley nowhere. I'm not sure what the actual law is but its something to do with paying them for a years worth of insurance, fact that you've only used a month of it is bad luck. If he'd paid up front he wouldn't have the option of not paying the rest, if you see what I mean, to insure the car for a certain amount. So its costing xxx to insure the whole of the car for the whole of a year. If only paid a tenth of it, does that mean they only have to pay a tenth of the value for the write off? You could try arguing contra - ing one against the other, but that would still leave a balance owing to them.

    | know that sounds like a load of gobbledy gook but I remember looking it up at the time and it was right, I just haven't explained it very well.....
    Is no longer here

    Comment


    • #3
      Re: car insurance claim!

      He is not insuring the car any longer, it has been written off. So why should he have to pay for a year?

      He cannot insure a car that no longer exists and he need not pay any more. For example, had he been unable to drive due to illness or changed his job and got a company car and no longer needed his own car, he would have been entitled to cancel his cover and would only be liable for the use he had during the time he needed cover.

      This situation has probably arisen because he has taken out a finance deal with a third party in order to fund the monthly payments of the insurance. Insurance companies do this all the time, they offer either a one off payment of the entire premium, or they allow you to pay via installments - but they cannot expect him to pay for the whole years premium if he no longer has the car.

      He will not get a refund however, as he has made a claim on the policy, but most insurers let you use the rest of it up, in other words, if he got the same or lesser vehicle there would be nothing to pay, if he got a more expensive vehicle to insure he would pay the pro rata difference.

      One question though, why was he paying a £1200 premium for a car valued at £800, or was that sum provided by the insurance company?

      Comment

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