Cant Be Right Surely?

[ilovemarkb]

my step son (student) driving along and a car reversed out causing step son to spin and hit another car. The driver of the reversing car has admitted reliability! (relief)!! My stepsons car was badly damaged so he now has a courtesy car until insurance is sorted. We are utterly shocked that he has received an email today stating that
car
market value £500
Less excess £750
Less remaining insurance premium £519.24
Settlement Figure is -(minus) £769.24

I still cant get my head around this. One day he has a car (fully comp of coarse) a week later he has no car and owes £769. And to add insult to injury he has to give the courtesy car back that his mam has just filled to the brim with petrol

[ilovemarkb]

should say LIABILITY lol

[Retrochic]

Surely if he took out the insurance say in December then he would only be liable to pay installments until the Insurance Company is no longer liable. If he had sold the car, instead of writing it off, he would not be expected to pay back the remaining Insurance installments would he? Also if the other driver has claimed liability then the your sons Insurance Company will sue the other drivers Insurance company so you son should owe nothing.

[ubasses]

Unfortunately car insurance is an annual premium. The Insurance Company actually loan him the money to buy the policy and he is paying back the loan by monthly instalments, so yes, the loan has to be repaid.

[bednobs]

do you believe the market value is more than £500? you can try to agrue it a bit with the insurance company if so

[ilovemarkb]

thanks for replys so far!!!! head in the shed!!!!! similar cars on auto trader for 700-800

[BRIGHT SPARK]

You may be able to claim the £750 excess if you have motor legal protection.The insurer may not be obliged to make this claim.

[New Judge]

The remaining insurance premium is payable whatever else happens. As ubasses points out, the premium is an annual one and the insurers offer you the facility to pay it monthly. It's just the same as buying a TV on credit. If you get burgled the day after you buy it and it gets stolen the remaining instalments are still payable.

I think they may struggle to charge your stepson the difference between the market value of his car and the excess (i.e. £250). An excess is designed to make the policyholder liable for the first £x of any claim. It is not designed to provide the insurers with funds should a claim be for less than the excess. There are two ways to demonstrate this:

If he made no claim at all (i.e. just swallowed the cost of the incident himself) no payment would be due to the insurers.

If his car was worth more than the excess and he sustained £500 worth of damage the insurers could not expect a £250 payment so that he could get it repaired at his own expense.

His best bet would be to persue the reversing driver for £500. This is the most he can expect, it being the market value of his car. But alas he is stuck with the £519 policy payments.

[Zacs-Master]

His excess was more than the value of the car which seems ridiculous of the insurance company to accept. You would always be in negative equity with the car.

[Old_Geezer]

It occurs to me that it is a bit of a cheek to insist the whole of an annual insurance is due prior to receipt of the service. You use it up a moment at a time. Fairness suggests it should be paid for and due at the same rate. In which case it's not credit, it's up an front payment demand that they'll relent on month by month.

Cheeky bees these companies. Demand cake and eat it. And they all get away with it.

[hc4361]

OG, you can get month by month rolling insurance but it is much, much more expensive.

[Retrochic]

So what happens when you sell your car and you've been paying the insurance by DD? I've never ever been asked by an insurance company to repay the total amount owing on a Policy because I've cancelled the insurance due to sale of vehicle -the most I've been charged was a small admin fee because I did not take out the new car Insurance with the same company.

[BRIGHT SPARK]

Retro.....if you sell the car and cancel the policy the remainder of the premium may not be due....however it will be due if a claim is made.

[THECORBYLOON]

If the insurance company valued the car at less than the excess, why did they not suggest Third Party only?

[BRIGHT SPARK]

TCL........the insurance company dont value the car when you take out the policy...they ask you to give a value .......but they do value it when you claim.

[THECORBYLOON]

BRIGHTSPARK I know that but is it likely that the value of the car dropped so much between the time the most recent policy began and the accident?

[EDDIE51]

The insurance company is wrong, he does have to pay the £519 .24 but as the excess is more than the car is worth there should just be no payout on that.
As the other party has admitted liability they ( or rather their insurance)should pay his excess and pay for a courtesy car. That is what happened to me when someone drove into me on my side of the road.

[ilovemarkb]

thanks guys for all of your replys. my stepson has rang his insurance to say hes not accepting their offer but he has been told that the man that admitted liability has changed his mind to say that it wasnt his fault. clearly it was there was a witness and its obvious by the damage who was at fault.

[EDDIE51]

What actually happened? Did your step son hit the reversing car or another one?

[ilovemarkb]

im not very good at describing but basically son was driving along a road with houses on one side and trees on the other. A car reversed off his drive and hit the back half of sons oncar the passenger side causing him to spin and hit a females parked car. The female witnessed the accident.