With the rising cost of car insurance, finding the best car insurance for young drivers can be somewhat of a challenge.
Sometimes, it’s best not to be tempted by the cheapest offer and to instead shop around to find out who will give you the best cover – those who sign up with an inappropriate policy could end up in a dispute with their car insurer.
When the driver and an insurer are unable to come to an agreement, the Financial Ombudsman Service (FOS) normally deal with financial services complaints.
Between April 2010 and April 2011, the FOS received around 5,800 complaints relating to car insurance, so if you’re currently in the process of trying to find a good deal, then these are the FOS’s most commonly reported complaints.
The most common car insurance complaint normally occurs after an accident – the repair.
When selecting an insurer, check the small print to see who is responsible for fixing the car. Some state that repairs are the responsibility of the owner, but most policies say that the company will pay for any damage done to the vehicle depending on the circumstances of the accident and the level of cover purchased.
If a policy does cover damage, then check to see how long the repairs are guaranteed for, as it does vary.
The FOS says, generally, if an insurer arranged the repair, then they are responsible for the quality of the work.
Some insurers also insist that policy holders have to visit one of their approved garages. If the car is taken elsewhere, then the insurer will normally only pay the fee that their mechanic would have charged.
If the worst comes to the worst and a vehicle is a ‘write off’ then some policy holders complain that they were not given reasonable compensation.
In most cases, a policy holder will be entitled to the market value of the vehicle immediately prior to the date of damage and not the original value of the car.
This could be substantially less than the amount that the vehicle owner is expecting.
However, to protect against this shortfall, taking out GAP (guaranteed asset protection) insurance will cover the difference between the value of the vehicle before it was damaged and the value of the car when the policy was purchased.
Before taking out a policy, car owners should be honest with insurers regarding any modifications and changes. Sometimes, an insurance provider will refuse to pay a claim because they say the consumer failed to disclose any alterations to the car, leading to their claim being rejected.
If there is any confusion, the FOS says, “We look at what questions the insurer asked at the time the consumer applied for the policy to try to establish whether there had been any modifications to a vehicle”
“We will also consider whether any non-disclosure on the part of the consumer was material to the claim and the extent to which the non-disclosure was deliberate, reckless or inadvertent.”
Most insurance companies operate no-claims discount (NCD) incentives, but this will not always be quite as simple as it sounds as each company may set out its NCD rules differently.
Details of any applicable NCD can be found on a policy holder’s renewal notice issued by the current insurer, but sometimes drivers can only claim the discount if they continue buying insurance with the same company.
If the driver takes out a new agreement, then their no-claims discount might not carry over to the new policy.
The FOS feels that this policy should be explained very clearly.
“A motorist will think they have a certain amount of no-claims bonus but when they move to another insurance company, it turns out to be less than they thought”
“This can result in a financial loss for the motorist as the new insurer based the given premium on the amount of no-claims bonus stated.”
A policy may be renewed automatically without specific questions being asked, but drivers must notify the company if their circumstances change.
Policyholders are required to be honest about their details and companies will normally specify what they need to know in the policy handbook issued when cover was taken out.
If an insurer wants to reject a claim based on non-disclosure, they will have to prove that they asked for the relevant information.
One FOS complainant had his claim for car theft turned down when the insurer found out that before renewal, he had been convicted of a drink-driving offence which he hadn’t disclosed.
The FOS rejected his complaint saying, “We thought that any driver would know their insurer would consider the conviction and disqualification highly significant and would realise they had to disclose this when renewing their insurance.”
Car insurance for young drivers with insurethebox
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