Car written off insurance cancelled, now stuck

[Aphrabehn]

Asking for a friend:

My car was written off in January (no fault accident, I was driven into, protected no claims). The insurance company made the pay out and then cancelled my policy. I thought this was unusual as I thought I would still have the policy and have to pay unless I cancelled it.

I’ve had nothing but trouble getting a new policy (previously was paying £400pa and skyrocketed to £750+). I’ve been borrowing a family member’s car occasionally and they put me on their insurance to help me out.

I went back to the insurer who cancelled the policy as I am buying the family member’s car off them so insurance needs to be in my name. Insurer couldn’t give me a quote due to having a cancelled policy.

Is this something that is going to follow me around having had a cancelled policy which wasn't my fault? Can I take this further? Complaint to the insurer or to the ombudsman? Or is this life?

[alscar]

Some Insurers cancel the policy after a payout because there is then nothing to insure unless of course a replacement vehicle is ready to step in.
Other Insurers give a 14 days grace period in which the policy is in effect suspended pending that further addition.
Your friend has done nothing wrong per se so the cancellation is not the usual cancellation that requires a few years of pain potentially in declaring it.
I would be going back to his previous Insurer and hope he gets a brighter call agent on the phone and if not he should ask to speak to someone more senior.
Obviously they are not under any need to provide a quote but they need to have a better reason that we cancelled your policy.
Failing that use a comparison site.

[Collectingbrass]

Aphrabehn said:

Asking for a friend:

My car was written off in January (no fault accident, I was driven into, protected no claims). The insurance company made the pay out and then cancelled my policy. I thought this was unusual as I thought I would still have the policy and have to pay unless I cancelled it.

I’ve had nothing but trouble getting a new policy (previously was paying £400pa and skyrocketed to £750+). I’ve been borrowing a family member’s car occasionally and they put me on their insurance to help me out.

I went back to the insurer who cancelled the policy as I am buying the family member’s car off them so insurance needs to be in my name. Insurer couldn’t give me a quote due to having a cancelled policy.

Is this something that is going to follow me around having had a cancelled policy which wasn't my fault? Can I take this further? Complaint to the insurer or to the ombudsman? Or is this life?

Your friend has two things going on here, probably and certainly in my experience of 2 total loss claims:

1. The contract to provide a pay out for a total loss on receipt of the insurance premium has been fulfilled and the contract has ended.
2. The premium has increased because (a) everyone's has anyway and (b) until the insurers of the written off car have recovered their costs from the third party, the premiums your friend has been quoted will be quoted as though the costs are never recovered.

Your friend needs to read every word of the communications from the insurer who has paid out and be really clear about whether the policy has been cancelled or ended. I find it really hard to see that the policy would have been cancelled in the way insurance langauge means it when they have paid out a total loss. Your friend should probably in this instance get a real person broker on the case to help them through this minefield.

Oh, and your friend's parents need to make sure they aren't fronting, or be seen to be fronting by their insurance co.

[davek_964]

The policy wasn't 'cancelled'. As others have said, it ended due to total loss.
My insurers paid out for my total loss in 2022 and ended the policy at that point. I do not have a 'cancelled' policy - and with protected NCD I didn't see increased premiums with the same insurer (and mine was a fault claim)

Edited by davek_964 on Sunday 16th June 15:21

[98elise]

Aphrabehn said:

Asking for a friend:

My car was written off in January (no fault accident, I was driven into, protected no claims). The insurance company made the pay out and then cancelled my policy. I thought this was unusual as I thought I would still have the policy and have to pay unless I cancelled it.

I’ve had nothing but trouble getting a new policy (previously was paying £400pa and skyrocketed to £750+). I’ve been borrowing a family member’s car occasionally and they put me on their insurance to help me out.

I went back to the insurer who cancelled the policy as I am buying the family member’s car off them so insurance needs to be in my name. Insurer couldn’t give me a quote due to having a cancelled policy.

Is this something that is going to follow me around having had a cancelled policy which wasn't my fault? Can I take this further? Complaint to the insurer or to the ombudsman? Or is this life?

If your insurance was ended because the car was written off then you don't need to declare it as cancelled. The car doesn't exist any more and your policy has paid out. The policy has served its purpose and you have done nothing wrong.

If you replace the car fairly quickly then the insurer may keep the policy running with some adjustment for the new car.

[VSKeith]

Welcome to the arcane world of total loss claims, where cancelled and cancelled are two different things with vastly different effects, and where the difference is rarely explained to the customer until they answer standard questions for a new policy logically and honestly and see the effects of choosing one word over the other, which the insurance industry seems to think you should know.

[98elise]

VSKeith said:

Welcome to the arcane world of total loss claims, where cancelled and cancelled are two different things with vastly different effects, and where the difference is rarely explained to the customer until they answer standard questions for a new policy logically and honestly and see the effects of choosing one word over the other, which the insurance industry seems to think you should know.

Or they could just read the explanation/information along side the question when taking out a policy. If that's not clear speak to a person at your insurer.

Last week we had people failing to understand that you need commuting on your policy when using your car for commuting.

You've got to wonder why so many people struggle with insurance "small print" yet were able to read and understand the highway code, and pass an exam.

Edited by 98elise on Monday 17th June 10:17

[Countdown]

I think I agree with the OP here - I'm not sure why a total loss means the Policy has to end. For example if the OP had had a total loss on Day 365 of the Policy compared to Day 1 he would have had roughly the same pay out but benefitted from a year's insurance cover as well.

Another possible scenario - let's say the car is worth £10k; if the OP makes 4 claims during the year, each of £2.5k, the Policy won't end after the 4th payout, it will carry on until the end of the year.

What would have happened if the OP had only TPF&T cover rather than Fully comp? Would it have ended if the OP had written his own car off?

Basically if you pay for a year's worth of insurance cover you should GET a year's worth of insurance cover regardless of how many payouts the InsCo makes.

[charltjr]

It depends on the insurer.

Axa let my policy continue on a new car after a total loss earlier this year.
Admiral told me they will cancel the policy in the event of a total loss when I insured a car with them last week.

[Sheepshanks]

Countdown said:

Basically if you pay for a year's worth of insurance cover you should GET a year's worth of insurance cover regardless of how many payouts the InsCo makes.

Not really. You insure the car for a year. It gets written off after a month. The policy pays out so it's done its job. The end. This catches out people who have pay monthly insurance - they're dismayed to have the whole years premium taken off the payout.

Seems to vary by insurer. LV just allowed another car to replace the written off one.

[TwigtheWonderkid]

Countdown said:

Basically if you pay for a year's worth of insurance cover you should GET a year's worth of insurance cover regardless of how many payouts the InsCo makes.

On most policies, you do. But if you buy a policy that says in it's Ts & Cs, "we will insure you for a year or until your vehicle is written off", then you can't complain when your policy ends when your car is written off.

[snuffy]

Countdown said:

I think I agree with the OP here - I'm not sure why a total loss means the Policy has to end. For example if the OP had had a total loss on Day 365 of the Policy compared to Day 1 he would have had roughly the same pay out but benefitted from a year's insurance cover as well.

Another possible scenario - let's say the car is worth £10k; if the OP makes 4 claims during the year, each of £2.5k, the Policy won't end after the 4th payout, it will carry on until the end of the year.

What would have happened if the OP had only TPF&T cover rather than Fully comp? Would it have ended if the OP had written his own car off?

Basically if you pay for a year's worth of insurance cover you should GET a year's worth of insurance cover regardless of how many payouts the InsCo makes.

If the policy paid out for a total loss, what exactly, is there left to insure ?

[Aphrabehn]

98elise said:

VSKeith said:

Welcome to the arcane world of total loss claims, where cancelled and cancelled are two different things with vastly different effects, and where the difference is rarely explained to the customer until they answer standard questions for a new policy logically and honestly and see the effects of choosing one word over the other, which the insurance industry seems to think you should know.

Or they could just read the explanation/information along side the question when taking out a policy. If that's not clear speak to a person your insurer.

Last week we had people failing to understand that you need commuting on your policy when using your car for commuting.

You've got to wonder why so many people struggle with insurance "small print" yet were able to read and understand the highway code, and pass an exam.

Thanks for the replies, I've just checked with my friend and seen the policy letter after the total loss and it specifically says "cancelled" rather than ended.

I've got my friend to ask a simple question of their insurer - has the policy been cancelled or ended.

Cheers again will report back with any interesting answers.

[Sir Bagalot]

Also bear in mind that if your friend paid £365 for the policy and the accident happened on day 100 then I'd also be chasing the third party for an uninsured loss of £265 due to the policy ending.

[Racing Newt]

98elise said:

Last week we had people failing to understand that you need commuting on your policy when using your car for commuting.

You've got to wonder why so many people struggle with insurance "small print" yet were able to read and understand the highway code, and pass an exam.

There are many people who were driving before "commuting" become a separate category, of which i am one, it should be remembered that the insurance companies are not in business to subsidise the individual or the corporate but to make a profit out of an unfortunate situation.

[Alickadoo]

Aphrabehn said:

Asking for a friend:

Edited.

Is this something that is going to follow me around having had a cancelled policy which wasn't my fault? Can I take this further? Complaint to the insurer or to the ombudsman? Or is this life?

No, it won't follow you around, because it isn't you - remember?
Yes, you could take it further, but it's nothing to do with you.
Etc, etc.

[TwigtheWonderkid]

Sir Bagalot said:

Also bear in mind that if your friend paid £365 for the policy and the accident happened on day 100 then I'd also be chasing the third party for an uninsured loss of £265 due to the policy ending.

Why? He took out a policy that insured him for a year...OR... paid out on a total loss claim. They paid out for a total loss claim. The policy did exactly what it said on the tin. If he wanted a policy that would pay for a total loss and continued on to cover the replacement car, as many policies do, he should have bought that policy. Maybe it might have not been the absolute cheapest on the quote engine. But he picked the cheapest, probably not even considering the Ts & Cs.

You don't pay £2 for a roll in Greggs and come out moaning that it isn't lobster tail with a truffle drizzle.

[poo at Paul's]

TwigtheWonderkid said:

Countdown said:

Basically if you pay for a year's worth of insurance cover you should GET a year's worth of insurance cover regardless of how many payouts the InsCo makes.

On most policies, you do. But if you buy a policy that says in it's Ts & Cs, "we will insure you for a year or until your vehicle is written off", then you can't complain when your policy ends when your car is written off.

Most policies definitely don’t, in fact, I don’t know of any that would, that relate to a specific vehicle, ie not a trader policy etc.
If you insure a specific vehicle for 1 year, then that is the vehicle that is insured, and the loss risk that is assessed.
If it is subject to a claim day 1, it’s covered and say it is repaired, fine. Same if it is then damaged day 10 again, it’s covered, same as day 365.
But if it is a total loss day 1 or day 10 or day 365, that’s it! The vehicle is paid out in full, and at that point there’s no vehicle left to insure, so the insurance ends. They cannot insure a vehicle for another 6 months, that they pay out on in full and then own themsleves!
It is a common misconception on monthly policies, people think if it’s a total loss after 2 months, they can stop paying, in reality, before the claim can be settled at 2 months, they make you pay, or deduct from pay out the remaining 10 months of the premium.
Policies premiums are based on all claims histories for all drivers, all such vehicles etc, and some are total losses on day 1 and some on day 365,, most not subject to a claim at all. That’s the luck of the draw, and the premiums reflect all that.

[liner33]

TwigtheWonderkid said:

Why? He took out a policy that insured him for a year...OR... paid out on a total loss claim. They paid out for a total loss claim. The policy did exactly what it said on the tin. If he wanted a policy that would pay for a total loss and continued on to cover the replacement car, as many policies do, he should have bought that policy. Maybe it might have not been the absolute cheapest on the quote engine. But he picked the cheapest, probably not even considering the Ts & Cs.

You don't pay £2 for a roll in Greggs and come out moaning that it isn't lobster tail with a truffle drizzle.

"They" didn't pay out anything the third party did

[98elise]

Racing Newt said:

98elise said:

Last week we had people failing to understand that you need commuting on your policy when using your car for commuting.

You've got to wonder why so many people struggle with insurance "small print" yet were able to read and understand the highway code, and pass an exam.

There are many people who were driving before "commuting" become a separate category, of which i am one, it should be remembered that the insurance companies are not in business to subsidise the individual or the corporate but to make a profit out of an unfortunate situation.

When did it become a separate category? It's been a thing for as long as I can remember and it's one of the question they ask when you take out new insurance.

It's really not a complex question and saying you were driving before it became a thing isn't an excuse for not understanding it. How do you cope with changes to the highway code, or things like mobile phone laws changing?