Car insurance company gone bankrupt

Not really. They’re generally laws unto themselves. Doing what they can to avoid paying out and colaberating together to raise premiums higher but as its compulsory and necessary then there is little we can do.

robbeech said:

Not really. They’re generally laws unto themselves. Doing what they can to avoid paying out and colaberating together to raise premiums higher but as its compulsory and necessary then there is little we can do.

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I’m sorry but I don’t know you, and I’m sure you are a nice person, but with the greatest of respect that comment really was a load of old rubbish, which must have been based on a misguided assumption. I’ve been a broker for 40 years and I know there is nothing further from the truth.

Condor7 said:

I’m sorry but I don’t know you, and I’m sure you are a nice person, but with the greatest of respect that comment really was a load of old rubbish, which must have been based on a misguided assumption. I’ve been a broker for 40 years and I know there is nothing further from the truth.

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I was talking about the insurance companies rather than the brokers. Though I think you knew that and your comments still stand.
Misguided assumption isn’t quite accurate.
A well know insurer (we are moving away from motor vehicles and into liability now) knowingly updated a colleagues policy to exclude a certain type of cover after they tried to make a claim. A certain item that was included in the policy when they took it out and paid in full was removed AFTER they tried to make a claim for that item yet the insurance company being the ones in power got away with this and the colleague almost lost their house. Thankfully this was property damage and not a personal / third party injury.
It is the insurance companies that set the price for particular things and it is them who work from the same data and algorithms, ones set out and calculated initially by, the insurance companies.
The general consensus is that insurance companies will ‘do anything they can to get out of paying’ and whilst this is extreme and often misunderstood (they should only pay out if they are obliged to due to the terms set out in the policy in question) there are cases where they’ve been known to stretch the rules in order to avoid this. Not paying out on a rear end shunt because the vehicle had a defective exhaust is one I am aware of, though this was 20 years ago so things might have improved.

So perhaps it’s a little harsh and isn’t intended to be negative towards all companies all of the time but the fact remains that some will fall foul of the law and certainly reasonableness when dealing with them and will consistently get away with it due to being the bigger company or organisation. There are, as we can see certain similarities to the railway here where the big TOCs get away with doing what they want and nobody seems to stop them.

I believe the complaints we hear about are probably just the tip of the iceberg. There are likely to be many cases where insurers have acted wrongly but the customer has simply put it down to experience rather than make a complaint or take the insurer to court.

You only have to look at the relevant part of the Financial Ombudsman Service website to see some of the cases which have been referred to it, and in many of them, the insurer concerned has been told to review it's position and compensate a customer.

I can think of several examples myself which I suspect would lead to a person tarring all insurance companies with the same brush. I appreciate that this results in generalisations, but that's what happens. Horse and Hound once carried an advert for horse insurance. The ad said it covered saddles and bridles etc if they were stolen from a locked, secured building. On the basis of this, a customer purchased the insurance and subsequently received a certificate to confirm the insurance was in place. A few months later, the stables were broken into, and the customer claimed for all the tack which had been stolen.
The insurer wrote and asked how many levers the tack room padlock had. She truthfully repled 3, at which point the insurer sent a policy document (this was the first time the customer had received one). In the policy, it said it was a requirement for at least a 5 lever padlock, and on this basis, the insurer rejected the claim. The customer issued county court proceedings, and the insurer sent a cheque in full settlement immediately upon receipt of the summons.

In another example, a driver who only had 3rd party cover was hit on a roundabout by a company car driver. A well known insurer wrote to a claimant and said, "The estimate from Regis Garage appears reasonable. We have no objection to you arranging for the repairs to be carried out." The claimant wasn't sure what this meant, and wondered if it meant the insurer was suggesting it would cover the cost of the repairs. Of course it didn't mean that at all, and insurer subsequently rejected the claim. The claimant then had to pursue the insurer and the driver of the car for several months before finally getting his repairs paid for.

In another seemingly bizzare example, a woman was behind a car waiting to join a roundabout. The car in front moved forward and stopped suddenly, when it was already half way round the roundabout, even though there was no reason for him to do so. The woman managed to stop in time, but the other driver alleged she'd made contact with his car. He then attempted to claim for whiplash injuries and damage to his car.
Despite the fact that there was pre existing damage to the claimant's car, which a garage confirmed looked like it had been done by first removing the rear bumper and then reversing the car into a wall, the woman's insurer insisted on settling in his favour. The only reason she didn't refer her complaint to the FOS is that she had a protected NCB and didn't want the hassle involved in pursuing the matter.

And insurers wonder why people are reluctant to trust them.

Condor7 said:

I’m sorry but I don’t know you, and I’m sure you are a nice person, but with the greatest of respect that comment really was a load of old rubbish, which must have been based on a misguided assumption. I’ve been a broker for 40 years and I know there is nothing further from the truth.

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Some people might say that there are features of the UK market for private motor insurance and related goods or services that, either alone or in combination, prevent, restrict or distort competition such that there are adverse effects on competition.

Or is that a load of old rubbish too?

Thanks robbeech for your considered reply, and yes I was talking about insurance companies, but from a brokers point of view. I obviously cannot comment on the example you mention, or indeed those mentioned by swj99 as I don’t know all the facts, but my experience is most claims that are rejected are down to incorrect information being given by the policy holders in the first place, even though this may have been unintentional. For instance the thief of tack mentioned above, I would say almost certainly that the original proposal form would have asked if the stables had 5 lever mortise deadlocks and the policyholder mistakenly said yes, after all how many of us know for certain? Unfortunately though it is at the time of completing the form we need to make certain, in reality most don’t do this until they have a claim. I am not saying this was the case in the above circumstances but I would be amazed if it wasn’t.

Of course it is the small handful of claim that are rejected that stick in the memory but insurance companies pay out hundreds of thousands of claims every year, only a small percentage are rejected and as mentioned above is nearly always down to unintentional incorrect information being provided at inception.

tony-mac I’m sorry but I don’t even understand what you are saying.

Car insurance is a grotesque scam in my experience.

My car was written off last year in a no-fault accident, and despite paying the market price of £3999 for it two weeks prior it was valued at just under £2800 by the insurer. Less my excess, and I was significantly out of pocket.

A friend was caught driving without insurance a few years ago (having missed two deadlines to send proof of no claims, they cancelled his policy). That's their fault, and they were caught by the police fair and square. The police use a selected private company to tow and impound the vehicle. They got six points and a fine by fixed penalty. All fair enough so far.

To get an uninsured car out of a pound, you must of course insure it. But it's not good enough to just have standard car insurance on your car. You have to have an "impound insurance" premium, so you can drive the car fifty yards from inside the pound, onto the public road. This premium is only available at a few smaller insurers, so there is almost no competition. Impound insurance is around twice the normal price of regular car insurance, so instead of their policy costing £500, it was now over £1000. That's an extra £500 to the insurer for the privilege of driving fifty yards. I expect the Space Shuttle's insurance was cheaper per yard when rolling to the Launchpad at Cape Canaveral.

The pound - a selected private company - are under instructions from the police not to release cars without the impound surcharge. It's all a lovely little cartel, a triumvirate of insurer, pound, and policeman all working together to f*** you over one more time.

Not many of us would mind if the fine for uninsured driving was jacked up by £500, but it's plain rotten for the system to ensure that penalty goes directly to the new insurer, locked down by the fact that police and pound won't give your car back until you do.

I hate the whole set up.

Condor7 said:

tony-mac I’m sorry but I don’t even understand what you are saying.

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It was a quote from the competition commission who found that car insurance companies were not acting competitively.

AlterEgo said:

Car insurance is a grotesque scam in my experience.

My car was written off last year in a no-fault accident, and despite paying the market price of £3999 for it two weeks prior it was valued at just under £2800 by the insurer. Less my excess, and I was significantly out of pocket.

A friend was caught driving without insurance a few years ago (having missed two deadlines to send proof of no claims, they cancelled his policy). That's their fault, and they were caught by the police fair and square. The police use a selected private company to tow and impound the vehicle. They got six points and a fine by fixed penalty. All fair enough so far.

To get an uninsured car out of a pound, you must of course insure it. But it's not good enough to just have standard car insurance on your car. You have to have an "impound insurance" premium, so you can drive the car fifty yards from inside the pound, onto the public road. This premium is only available at a few smaller insurers, so there is almost no competition. Impound insurance is around twice the normal price of regular car insurance, so instead of their policy costing £500, it was now over £1000. That's an extra £500 to the insurer for the privilege of driving fifty yards. I expect the Space Shuttle's insurance was cheaper per yard when rolling to the Launchpad at Cape Canaveral.

The pound - a selected private company - are under instructions from the police not to release cars without the impound surcharge. It's all a lovely little cartel, a triumvirate of insurer, pound, and policeman all working together to f*** you over one more time.

Not many of us would mind if the fine for uninsured driving was jacked up by £500, but it's plain rotten for the system to ensure that penalty goes directly to the new insurer, locked down by the fact that police and pound won't give your car back until you do.

I hate the whole set up.

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Im not going to defend the set up as I can't. But you can get impound insurance for just one day, its doesn't have to be for the year.

GB said:

Im not going to defend the set up as I can't. But you can get impound insurance for just one day, its doesn't have to be for the year.

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Given that it exists, what would amaze me would be the fact that you can get impound insurance for a year. Do insurance companies actually sell such policies? Why would anyone want one?

Sorry, I meant it doesn't have to be added to a normal insurance policy.

GB said:

Im not going to defend the set up as I can't. But you can get impound insurance for just one day, its doesn't have to be for the year.

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The police will not usually accept a period of insurance lower than 30 days to release your car.

AlterEgo said:

To get an uninsured car out of a pound, you must of course insure it. But it's not good enough to just have standard car insurance on your car. You have to have an "impound insurance" premium, so you can drive the car fifty yards from inside the pound, onto the public road. This premium is only available at a few smaller insurers, so there is almost no competition. Impound insurance is around twice the normal price of regular car insurance, so instead of their policy costing £500, it was now over £1000. That's an extra £500 to the insurer for the privilege of driving fifty yards. I expect the Space Shuttle's insurance was cheaper per yard when rolling to the Launchpad at Cape Canaveral.

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If what you say is true, then it might be worth asking why that premium is only available at a few smaller insurers. After all, it's something that would seem pretty trivial for a larger insurer to add to their offering. And if prices for it are as much a rip-off as you say, then you'd have thought that other insurers would be falling over themselves to come into that market to get a share of those profits.

I'm going to hazard a guess that maybe premiums are higher because insurers calculate (probably correctly) that people who do something to get their cars impounded are, on average, not the most careful/law-abiding of drivers, and therefore are much more likely to suffer accidents in the future. (Obviously there will be exceptions, but insurance companies have to deal with the average behaviour of lots of individuals).

As a general point, there must be hundreds of thousands, if not millions, of claims made and settled in the UK every year. I don't doubt that there are going to be bad eggs in the industry (as with any industry). But I'm not sure you can deduce from a few hundred or even a few thousand claims that are handled badly each year that there is something systematically wrong in the industry. Maybe there is, maybe there isn't, but a small proportion of claims going wrong doesn't by itself prove anything either way.

Also, let's not forget that insurance companies themselves have to deal with customer fraud, ranging from at one end people who deliberately exaggerate the value of their possessions when making an otherwise genuine claim, right up to at the other end, drivers who deliberately set themselves up to be rammed so they can get the insurance. Some of those can be hard to spot, and it's arguably quite understandable that insurance companies therefore sometimes take a defensive attitude in assessing claims.

DynamicSpirit said:

If what you say is true, then it might be worth asking why that premium is only available at a few smaller insurers. After all, it's something that would seem pretty trivial for a larger insurer to add to their offering. And if prices for it are as much a rip-off as you say, then you'd have thought that other insurers would be falling over themselves to come into that market to get a share of those profits.

I'm going to hazard a guess that maybe premiums are higher because insurers calculate (probably correctly) that people who do something to get their cars impounded are, on average, not the most careful/law-abiding of drivers, and therefore are much more likely to suffer accidents in the future. (Obviously there will be exceptions, but insurance companies have to deal with the average behaviour of lots of individuals).

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Mainstream insurers are more than happy to insure drivers with a record of driving uninsured, so that isn’t the reason. My friend has been subsequently insured through traditional insurers with only a very small rise in premium compared to what he paid before being caught. He is also an older driver so it’s not like age is likely to be a factor.

Condor7 said:

........I would say almost certainly that the original proposal form would have asked if the stables had 5 lever mortise deadlocks and the policyholder mistakenly said yes, after all how many of us know for certain? Unfortunately though it is at the time of completing the form we need to make certain, in reality most don’t do this until they have a claim..........

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The only proposal form ever completed was the one in the magazine itself, which stated the benefits of the policy, the price, the company and the address to send payment.
She only received a policy document after the event which gave rise to the claim.
When the claim was initially rejected, it was politely pointed out to the insurer that in the absence of an actual policy docuent, the claimant was entitled to rely on the advert / application form as being the terms and conditions of the insurance policy, which simply said the items were covered if they were stolen from a locked, secured building. There was no mention of the type or quality of locks required to be fitted.
The insurer failed to pay, and county court proceedings were issued. The insurer didn't defend the claim, and when notifed that a default judgment had been obtained, it issued a cheque for the full amount of the claim, including court fees.

swj99 said:

The only proposal form ever completed was the one in the magazine itself, which stated the benefits of the policy, the price, the company and the address to send payment.

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You obviously seem very clued up regarding this case, and not knowing anything about it myself I cannot refute what you say, only that I cannot see it is possible to insure something by providing so little information, and in all my years of experience have never heard of an insurance company doing that. That being said the fact the insurer did not defend the claim would indicate they were remiss in not asking all the correct questions on the proposal form.

Either way I think you have found a very obscure set of circumstances to use to dismiss all insurance companies as trying to rip the public off.

DynamicSpirit said:

As a general point, there must be hundreds of thousands, if not millions, of claims made and settled in the UK every year. I don't doubt that there are going to be bad eggs in the industry (as with any industry). But I'm not sure you can deduce from a few hundred or even a few thousand claims that are handled badly each year that there is something systematically wrong in the industry. Maybe there is, maybe there isn't, but a small proportion of claims going wrong doesn't by itself prove anything either way.

Also, let's not forget that insurance companies themselves have to deal with customer fraud, ranging from at one end people who deliberately exaggerate the value of their possessions when making an otherwise genuine claim, right up to at the other end, drivers who deliberately set themselves up to be rammed so they can get the insurance. Some of those can be hard to spot, and it's arguably quite understandable that insurance companies therefore sometimes take a defensive attitude in assessing claims.

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You are just so spot on with those comments. The most balance view expressed so far.

If you have genuinely done something wrong and your car is impounded then I think having to pay extra is a little bit of tough luck really. I do believe it should be dealt with with the penalty for the offence, that way someone deciding not to pick up the car does not get away with this. However, the rule is out to get genuine people too.
It’s worth noting that this impound insurance is also required if a person has an uninsured vehicle stolen (from private land) which is later found. In order to get that vehicle back you understandably need to insure it but you will need to pay these additional fees. Is this fair?

I think it is quite easy to believe that there are things missed out when starting up a policy yet the big companies generally win in the ensuing argument.
We can relate this to the railway with ticket purchasing.
If I ask for a ticket at the ticket office and I am sold a route restricted ticket without being told then it does not apply. Of course, there is no way to prove that I wasn’t told about this restriction so guilty until proven innocent takes charge and you have to buy a new ticket / excess.

It’s a small small minority of cases where mistakes and problems occur with insurance companies. As people rightly remind us, the vast majority of claims are dealt with quickly and professionally without any issues but it is the few that don’t that stick in your head, particularly when the insurance company is acting inappropriately.

robbeech said:

Not really. They’re generally laws unto themselves. Doing what they can to avoid paying out and colaberating together to raise premiums higher but as its compulsory and necessary then there is little we can do.

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Condor7 said:

I’m sorry but I don’t know you, and I’m sure you are a nice person, but with the greatest of respect that comment really was a load of old rubbish, which must have been based on a misguided assumption. I’ve been a broker for 40 years and I know there is nothing further from the truth.

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My wife worked for an insurance broker, and what she described is entirely in line with robbeech's statement. It is also entirely in line with my own experiences as a customer.

robbeech said:

Not really. They’re generally laws unto themselves. Doing what they can to avoid paying out and colaberating together to raise premiums higher but as its compulsory and necessary then there is little we can do.

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as the poster who is a broker said - you are spouting bilge there

mph1977 said:

as the poster who is a broker said - you are spouting bilge there

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It’s interesting that since posting this several people have agreed and given examples. One of them is married to a broker. So the opinions of 2 brokers are polar opposites here. When we add that to the experiences of the other people here we see that it likely isn’t bilge. Perhaps extreme, harsh, an exaggeration if you will, but not bilge.

they aren't entirely squeaky clean. e.g.,
https://www.telegraph.co.uk/finance...nsurers-must-cut-premiums-says-regulator.html

Also bilge?

I had classic policy on a jag. They sent me a certificate and after a year, when the policy was renewed, they didnt' send a replacement. I rang and asked for one, and they said, "we;ve emailed one to you."
I reminded them that insurance contracts have to be evidenced in writing, which means in practical terms, an actual certificate, made of paper, not an emailed electronic representation of one. They still didn't send one. When I sold the car, about five months into the insurance period, I phoned to cancel the policy. And the insurer wrote to me to ask for the certificate back. I haven't sent it back because I'm still waiting for the inept money grabbing b'stards to send it to me. Come ot think of it, I've been waiting for about seven years now.

Norwich Union once invited a friend of mine to take them to court as a result of a personal injury he sustained when their insured driver crashed into his car. So he did, and ended up getting about £2000 more than he would have been willing to accept if they had made a reasonable offer. It also cost them a fair bit in court costs that they could have saved if they'd settled the claim properly to start with.

Here are a few reasons why insurance companies are occasionally seen in a bad light......

Insurance Companies selling written off cars to be repaired and put back on the road. And then in some cases, allowing a new owner to insure the car, but later refusing to pay out on a claim because the car is a category C. But not telling the owner until after the accident, when it’s too late.

Threatening to take people to court, even when they know a claim would be rigorously defended, when in reality they have no intention of pursuing the case, just to try and scare someone into paying money they are not liable for.

Settling a claim, but then attempting to claim against the person with whom they have just settled, ie by alleging that the claim was a 50/50 settlement when it was a ‘full and final settlement of all claims arising’ settlement.

Insurers settling a claim to the detriment of their own policy holders, for example when their policy holder was not to blame for the accident, but it’s easier and cheaper for the insurer to settle, resulting in a ‘black mark’ against the policy holder, despite the fact that they were not to blame.

Insurers failing to deal properly with claims against their policy holders, resulting in 3rd parties having to issue proceedings in order to obtain a settlement.

Insurers initially defending court claims against their policy holders, despite having no intention of actually allowing the case to proceed to a hearing, thus putting the 3rd party to the expense of preparing a case, and then settling in full a few weeks before the hearing date.

Insurance companies are just bookies with a nicer office.