Car insurers sting no-fault drivers
SUDDEN hikes in car insurance premiums seem to be driving many readers round the bend.
And I must say I don’t blame them. Take the case of Jason, of Wimborne, Dorset, whose car was rear ended.
The other vehicle drove into the back of him. It was not Jason’s fault yet the incident resulted in his premium going up 40 per cent.
Daphne, of Swindon, Wilts, was just as hard done by when her car wheels were stolen.
She didn’t make a claim but she notified her insurer about the incident because she thought she was obliged to. As a direct result her insurance premium was increased on renewal.
IS THIS LEGAL? Unfortunately, it is and the Financial Ombudsman openly states insurers can calculate their premiums however they want to.
But, in my view, there is an exception to this. The Consumer Rights Act says key terms must be made prominent to consumers at the point or before purchase.
With insurance, this means the consumer must be clearly told of the situations that could cause an insurance premium hike. Without this I think a rise could not be enforced and may lead to a claim that the insurance was missold. WHAT CAN I DO IF I SUFFER A
PREMIUM HIKE? The obvious answer is to shop around and seek alternative quotes. But a word of warning. All insurers log into a system called the Claims and Underwriting Exchange ( CUE), a database containing millions of claims records about consumers.
This was set up to help insurers to set their premiums.
There are three types of notification that can be put on your file – a fault claim, a non-fault claim or a notifcation only. An accident that was not the driver’s fault and for which they did not claim would count as a notification. It is likely you’d experience a hike in your premiums with most of the insurers i f you made a claim or notification. HOW DO I FIND OUT WHAT CUE
SAYS ABOUT ME? You can make a request to the company that operates CUE, by writing to Insurance Database Services Limited, Compliance, Linford Wood House, 6-12 Capital Drive, Milton Keynes, Buckinghamshire MK14 6XT and enclosing a cheque for £10.