The mystery car policy... set up by your father
Ms A.F. writes: I am sending you a copy of correspondence between me and an insurance company. My question is this: can you legally take out an insurance policy without authority and then make the insured person responsible for it? THE simple answer to your question is a clear ‘No’. While it is legal to arrange insurance for someone else, you need their permission to do it and if the person named in the policy does not even know the cover exists, then you cannot make them foot the bill.
The paperwork you sent me shows that a motor insurance policy was set up through Right Choice Insurance Brokers of Romford in Essex. The premiums were to be paid by monthly instalments under an arrangement with Close Brothers Premium Finance, a well-known company in the insurance world and fully authorised by the Financial Conduct Authority.
The problem was that you did not apply for the policy. The first you knew of it was when you received a letter thanking you for arranging cover and asking you to sign a credit agreement.
When you tried to explain and unscramble the deal, this was treated as a cancellation by the broker. It explained that your car had been insured up to the time you pulled out and it wanted £155 for the cover you have told me you never requested. So, what happened to lead to this mess? Well, you were out of work and faced with a big renewal premium from your existing insurer, you took your car off the road and left it at your grandfather’s home.
Unknown to you, your father then went online and completed an insurance application in your name. You were not using the car and he did not have your permission to use it. Nor did he have your permission to use your name to buy insurance and when you found out, you had words with him. You expected him to take responsibility for scrapping the policy and paying any costs, but he did neither. You have since sold the car, but have still received letters and demands about the bills.
I asked Close Brothers and the broker to investigate. Close Brothers quickly told me that the information it held came from the broker. It said: ‘As the broker set the credit agreement up, it is responsible for obtaining appropriate authority.’ Close Brothers received no money from anyone involved and apart from sending you the ‘welcome pack’ that you received, it took no further action and regards the matter as closed.
Dealing with the broker was trickier. It told me: ‘An online purchase of car insurance was made on the MoneySupermarket website, in the name of Ms A.F., using her vehicle and personal details.’
If this was done without your knowledge or consent, then this amounted to fraud. The broker added: ‘We have no way of knowing who was sitting at the computer and typing the information in at that time.’
Although there is no reason why the broker should be out of pocket any more than you, it has told me that after taking on board your story, it has cancelled the debt. You will hear no more about it, but I think your father has got off lightly.