Insurer back charging me £1000+

The_Abyss said:
I'm struggling to see why there would be a back charge. A charge for what exactly - the period of time that's already elapsed without any claims being presented?
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It doesn't matter if a claim was presented, a product was purchased for 12 months and used under false pretences. The fact is it does work like this and always has, they can and will levy a charge.

Best you could hope for is a reduction as a good will gesture, wouldn't hold my breath though.

If there were no back charges i'd insure all my cars as a 1.3 1996 Ford KA, say I live in the lowest risk area possible and I do 50 miles a year then just pay the additional amount in the event I make a claim for that year.
 
Iamzod said:
It doesn't matter if a claim was presented, a product was purchased for 12 months and used under false pretences. The fact is it does work like this and always has, they can and will levy a charge.

Best you could hope for is a reduction as a good will gesture, wouldn't hold my breath though.

If there were no back charges i'd insure all my cars as a 1.3 1996 Ford KA, say I live in the lowest risk area possible and I do 50 miles a year then just pay the additional amount in the event I make a claim for that year.
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Except in the event of a claim your insurance would not be valid. In this instance no claim has been presented and the insurer has suffered no financial loss.
 
In short, the above.

OP bought a product which was priced upon facts presented at the time. Those facts were not true. OP falls foul of the agreement made, insurance company is now looking to reclaim the additional cost that reflects the additional risk as a result of OPs endorsements.

The fact no claim has been made is irrelevant.
 
The_Abyss said:
Except in the event of a claim your insurance would not be valid. In this instance no claim has been presented and the insurer has suffered no financial loss.
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Doesn't work like that unfortunately, I spent 3 years recalculating premiums like this and not once did a complaint get anyone anywhere. You pay for time on cover, not for a claim hence why that years premium does not increase (apart from any pre-agreed excess) until renewal after you mow down a bus queue of children.

You pay to cover the insurers potential financial loss, if it doesn't happen then great, but the potential was still there and this is what the price is based upon.

Do you ask for a refund if you don't claim?
 
Iamzod said:
Policy won't be voided as you have to be really naughty for that. It'll likely end up with NCD being held back and it being recorded as an unpaid debt which will go on his credit file & at 1k+ probably get passed to debt collection.
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You keep talking about credit files, but him "owing" money on the company's say so isn't him obtaining credit then defaulting on it.
 
Sin_Chase said:
In short, the above.

OP bought a product which was priced upon facts presented at the time. Those facts were not true. OP falls foul of the agreement made, insurance company is now looking to reclaim the additional cost that reflects the additional risk as a result of OPs endorsements.

The fact no claim has been made is irrelevant.
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The insurance company has suffered no financial loss to that point as it did not underwrite the original insurance on the basis of the increased risk of the SP50. It insured upon the information and risks presented. No financial loss has resulted, as no claims have been presented. The insurer cannot go back and re-insure the whole year on the basis of new information as there is no risk - nothing happened - there were no claims.
 
spoffle said:
You keep talking about credit files, but him "owing" money on the company's say so isn't him obtaining credit then defaulting on it.
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If he is paying by direct debit it'll all be added onto his remaining premium, if he cancels the DD then the policy will remain unpaid, insurance policies show on your file just like mobile phone contracts.
 
The_Abyss said:
The insurance company has suffered no financial loss to that point as it did not underwrite the original insurance on the basis of the increased risk of the SP50. It insured upon the information and risks presented. No financial loss has resulted, as no claims have been presented. The insurer cannot go back and re-insure the whole year on the basis of new information as there is no risk - nothing happened - there were no claims.
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You are missing the point.

The underwritten policy is voidable. The facts presented by the OP were invalid, he is no doubt in breach of the terms/conditions. The policy will undoubtedly have wording which covers the action the company is now taking.

The simple fact is the OP DID have increased perceived risk whilst having an SP50 endorsement and the policy was underwritten without this risk incorporated.
 
Iamzod said:
Doesn't work like that unfortunately, I spent 3 years recalculating premiums like this and not once did a complaint get anyone anywhere. You pay for time on cover, not for a claim hence why that years premium does not increase (apart from any pre-agreed excess) until renewal after you mow down a bus queue of children.

You pay to cover the insurers potential financial loss, if it doesn't happen then great, but the potential was still there and this is what the price is based upon.

Do you ask for a refund if you don't claim?
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What is the risk to the insurer for the past 11 1/2 months where no claim has been presented, and what is the cost of insuring that risk? Insuring for future events - sure. Insuring against past events where nothing has happened?
 
Sin_Chase said:
I would fully expect an unpaid debt to feature on a credit report, irrespective of it being 'credit' or not.
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Then why is it called a credit file? Just because something is a "debt" doesn't mean it'll get added to your credit file. Things are only added when you take out credit agreements.
 
Sin_Chase said:
You are missing the point.

The underwritten policy is voidable. The facts presented by the OP were invalid, he is no doubt in breach of the terms/conditions. The policy will undoubtedly have wording which covers the action the company is now taking.

The simple fact is the OP DID have increased perceived risk whilst having an SP50 endorsement and the policy was underwritten without this risk incorporated.
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Where's the financial loss / cost to the insurer?
 
They don't have to demonstrate a loss.

OP signed a contract.
OP has withheld/neglected to disclose material facts.
OP is in breach of the terms and conditions.
T&Cs will no doubt stipulate the action the company is taking.
 
Sin_Chase said:
They don't have to demonstrate a loss.

OP signed a contract.
OP has withheld/neglected to disclose material facts.
OP is in breach of the terms and conditions.
T&Cs will no doubt stipulate the action the company is taking.
OP signed this contract.
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The contract didn't stipulate financial liability for non-disclosure. What if the additional charge was £10,000? What the T&Cs will say that an additional premium will be requested which if not paid will result in the policy being voided.

The reality is that if the OP doesn't pay all that will happen is the policy will be voided. Something they should be declaring to their new insurer.

If there has been a claim then the insurer can try an recover those costs after voiding, but that is a lot easier said than done.
 
The_Abyss said:
Where's the financial loss / cost to the insurer?
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Irrelevant, do they insure you for free if you do not claim?

It's based on potential risk, next time you complete a claim free year ask for a full refund minus an admin fee and listen whilst you get laughed at.

And this does work both ways, if you disclose something that reduces the premium such as the fact your additional driver is actually your spouse refunds can also get backdated, it isn't some sort of scam, it is all tightly regulated.
 
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Being perceived as conviction free op would most likely have been placed with an insurer with very strict underwriting criteria - but provided you're squeaky clean they'll quote a very competitive premium. Ordinarily the motoring conviction would have quoted them out of the market because they want clean drivers, but due to the late disclosure the ap will stand, it'll be backdated to inception because the conviction date precedes the policy start date.

It's worth going back to them and saying you're unwilling to pay the ap but are willing to be rebrokered straight away. The existing policy will be cancelled so no late disclosure issue and a new policy will be arranged with the speeding ticket factored in.

You won't notch up a years ncd for this year but it'll almost certainly work out cheaper than going elsewhere and having to pay the ld, providing they agree it.
 
Iamzod said:
If he is paying by direct debit it'll all be added onto his remaining premium, if he cancels the DD then the policy will remain unpaid, insurance policies show on your file just like mobile phone contracts.
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If you're paying monthly then it's a credit agreement as you've taken out a year policy but broken it down monthly payments.

But that isn't what I said anyway. The situation that has come up isn't a matter of credit, as it's not part of the agreement that was originally taken out if it was on a pay monthly policy.
 
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