Additional mileage

[rustychain]

Insurance contracts are unusual in that, unlike most other contracts, they are additionally (beyond the basic three principles of offer, acceptance and consideration) also based on ‘good faith’ ie. telling the truth.They have to be, as no insurer has the ability to check that each of their customers is telling the truth.

Setting that distinction to one side. It is incredibly difficult for an insurer to invalidate a motor policy after the claim event, unless there was deliberate and intentional non-disclosure (in simple terms, lying) by the insured person, when the application for insurance was made. To void the policy, after the claim event, the insurer would have to prove that their voiding of the policy was fair and reasonable in law and by common practice. This is particularly true of the third party liability section of the policy, the only part that is compulsory by law.

Whether the OP should or should not have declared his ‘over mileage’ to his insurer is now irrelevant. He’s done it and he knows the result of his disclosure.

Agree - I've raised the issue which shows I'm aware. They have a record of this so if I do intend to go over the allowance then I'm going to pay the premium.

I'm just surprised at the amount (50% of the original premium) and the change in excess.

The price tag of being honest....

 

[DJ123]

Did you make that up or did your mate tell you?

The declaration made is the mileage that the vehicle is estimated to travel during the policy year, not who - out of several (presumably named) drivers on the policy - was going to be driving the vehicle to accrue the mileage total.

Knowing you work in the industry, i'm sure you know people who aren't on your policy can drive others people's car on a 3rd party basis - if their own policy allows.

Your insurance is for you, that vehicle, and what coverage you have in place. Not for others who are not on the policy - the mileage restriction is not applicable.

 

[Mr Bean]

It is incredibly difficult for an insurer to invalidate a motor policy after the claim event, unless there was deliberate and intentional non-disclosure (in simple terms, lying) by the insured person, when the application for insurance was made. To void the policy, after the claim event, the insurer would have to prove that their voiding of the policy was fair and reasonable in law and by common practice. This is particularly true of the third party liability section of the policy, the only part that is compulsory by law.

Thank you.

The reason for asking was last year's car insurance. A few months after insuring the car we decided to take a mini tour of France, which would later take me over the mileage in the quote. My view was that the estimated miles at the time of purchase was correct and I would be ok if anything happened later in the policy.

I assume JB wasn't serious in his suggestion of disconnecting the speedo as surely that would potentially constitute an attempt to defraud the insurance company.

 

[Wapping]

Knowing you work in the industry, i'm sure you know people who aren't on your policy can drive others people's car on a 3rd party basis - if their own policy allows.

Your insurance is for you, that vehicle, and what coverage you have in place. Not for others who are not on the policy - the mileage restriction is not applicable.

The fellow knows he has accidentally (we assume) understated the mileage that he told his insurer he estimated he would do. He is not about to pretend that someone else drove the vehicle or that he lent it to third parties, which drove the mileage up.

The onus is always on the insurer to establish non-disclosure and to then prove that - had a truthful disclosure been made - then the contract would not have been entered into. If the insurer was able to put forward that they would not have entered into the contract, if they had been told that unknown third parties (not the insured) would regularly be driving the vehicle, that might well be sufficient grounds to void the coverage from inception, irrespective of the annual mileage.

In passing, it is not a mileage restriction. The policy (the contract) says nothing about mileage in it. In other words, nowhere in the policy does it say: This policy is only valid if the mileage per annum is less than X.

 

[rustychain]

Agree - they are aware of the issue now so I'd be a fool not to cough up if I need the extra allowance.

My main gripe is the cost (50% of the original premium) and the increase to the excess!

The price tag of being honest.....

 

[rustychain]

The fellow knows he has accidentally (we assume) understated the mileage that he told his insurer he estimated he would do. He is not about to pretend that someone else drove the vehicle or that he lent it to third parties, which drove the mileage up.

The onus is always on the insurer to establish non-disclosure and to then prove that - had a truthful disclosure been made - then the contract would not have been entered into. If the insurer was able to put forward that they would not have entered into the contract, if they had been told that unknown third parties (not the insured) would regularly be driving the vehicle, that might well be sufficient grounds to void the coverage from inception, irrespective of the annual mileage.

In passing, it is not a mileage restriction. The policy (the contract) says nothing about mileage in it. In other words, nowhere in the policy does it say: This policy is only valid if the mileage per annum is less than X.

I've been out of biking for 20 years, so estimated how many miles I thought I would likely cover (I was going to ask for 3,000 originally).

I happened to check the mileage the other day as I've got a 1,000+ mile trip planned for next week, hence starting this thread.

 

[Wapping]

Agree - they are aware of the issue now so I'd be a fool not to cough up if I need the extra allowance.

My main gripe is the cost (50% of the original premium) and the increase to the excess!

The price tag of being honest.....

Agreed.

Leaving aside that the increase in the estimated mileage is 20%, a not inconsiderable figure if you want view it that way.

The additional premium of £100 is, you tell us, 50% of your annual premium, which makes that figure £200. That’s pretty cheap for a year‘s cover, I guess.

I would say that a 50% additional premium is pretty harsh, a point I would have quibbled with the broker at the time. I might assume that a significant part of the cost is made up of the broker’s fee for making an amendment, irrespective of the reason for the alteration. Probably these fees are set out somewhere in the proposal they made? They often get overlooked in the joy of obtaining a cheap quote on day one.

The separate, parallel, increase in the excess from £100 to £400 doesn’t make a whole lot of sense.

 

[rustychain]

I phoned Adrian Flux (AF) yesterday to quibble the charge, change to the excess etc.

They reviewed the quote. The only change they could make was the price - £94 down from £100.

I asked about adding 2,000 miles (build in some more leeway in case we get a mild winter) - the same price, which didn't come as a complete surprise.

Approaching this from a different angle, I got a quote for a new policy with Carol Nash (8,000 miles per annum) which came in at £300 incl breakdown cover, back to £100 excess etc.

I'm tempted to jump ship, even though that means losing my (potential) first years NCD with AF (the policy expires in March next year).

Any pros/cons with this approach that I should consider?

If I cancel the AF policy it will cost £25 but I should get some of the policy cost back (6 months left).

Cheers

 

[Wapping]

There is nothing wrong with switching insurers mid-term, if it makes economic sense to do it.

You might as well make the estimated mileage the highest you can, if it doesn’t adversely affect the terms greatly. There is no penalty for going under the estimate but you (very probably) won’t get any money back for doing fewer miles so I wouldn’t bother asking.

 

[SBD]

Are Adrian Flux and Carole Nash related?

 

[Wapping]

Are Adrian Flux and Carole Nash related?

Does it make any substantive difference if they are or are not?

 

[Dave56]

As is always the case, be it motorcycle or any other area, insurance is a minefield to be negotiated at best with caution also a little suspicion and a deal of optimism.
It also has to be realised that the quality, professionalism and customer care of ANY insurance company is only ever revealed when a claim is made.
It is my understanding that customers if at any point are not satisfied with the response of said insurance company that they should clearly state during a call that they want to make an “official” complaint and you want their final decision in writing and should that decision not be to your satisfaction you will be taking the complaint to the insurance ombudsman.
As the insurance company has to foot the ombudsman’s bill, which I believe is about £500, they then may decide that its more financially prudent for them to uphold your complaint.
It also has to be emphasised that this is not always a “given“ and should be entered into as a last resort.

 

[Wapping]

As is always the case, be it motorcycle or any other area, insurance is a minefield to be negotiated at best with caution also a little suspicion and a deal of optimism.
It also has to be realised that the quality, professionalism and customer care of ANY insurance company is only ever revealed when a claim is made.
It is my understanding that customers if at any point are not satisfied with the response of said insurance company that they should clearly state during a call that they want to make an “official” complaint and you want their final decision in writing and should that decision not be to your satisfaction you will be taking the complaint to the insurance ombudsman.
As the insurance company has to foot the ombudsman’s bill, which I believe is about £500, they then may decide that its more financially prudent for them to uphold your complaint.
It also has to be emphasised that this is not always a “given“ and should be entered into thoughtfully.

Most here don’t understand the difference between an insurance company, an insurance broker, an insurance intermediary and an online search engine. It is a pretty safe bet that 9/10’s of the correspondents to these pages have never spoken to an insurance company in their lives. It is a similarly safe bet that none of them ever will either.

To save you any more “It is my understanding…..” the complaints procedures are clearly set out in the documentation sent out with the confirmation of cover.

 

[Dave56]

Most here don’t understand the difference between an insurance company, an insurance broker, an insurance intermediary and an online search engine. It is a pretty safe bet that 9/10’s of the correspondents to these pages have never spoken to an insurance company in their lives. It is a similarly safe bet that none of them ever will either.

To save you any more “It is my understanding…..” the complaints procedures are clearly set out in the documentation sent out with the confirmation of cover.

While I tend to agree with you regards customers and there understanding of brokers and insurance companies and the dreaded “terms and conditions” I think that my ”understanding“ regarding complaints etc is valid.

 

[Snaf]

Most here don’t understand the difference between an insurance company, an insurance broker, an insurance intermediary and an online search engine. It is a pretty safe bet that 9/10’s of the correspondents to these pages have never spoken to an insurance company in their lives. It is a similarly safe bet that none of them ever will either.

Who are we speaking to when we ring up then. I only ask as you seem to know the subject and I had recent run in with the RAC and the Financial Ombudsman stated that they're an insurance company that underwrite their own policies and their product/service is not regulated.

 

[EVskiy]

When I took out this year's insurance policy I asked for 5,000 miles.

I've realised that I'll probably need 1,000 more due to a trip coming up.

Adrian Flux want £100 (incl admin fee) and my excess will increase to £400 from £100.

Is this typical? Any workarounds?

Did your insurer take down the “current” mileage of the bike at the time of taking out the policy? If so, have you been giving them such information for as long as you have been insuring the bike, presumably with same insurer?

My angle here, is that perhaps you have been estimating to do 5000 miles each and every year, yet on the number of occasions, have not reached the declared mileage you would be covering. Does this mean the insurance company is due to refund you some money for unused cover mileage, because you were lesser risk to yourself and other road users? NO! So how on earth do you know if you will be covering 3000 or 6000 miles at the time of taking out the policy?

You perhaps have planned your trips for the year some 12 months ahead of time, and have created your GPX routes too, which would give an estimated total trip distance. Perhaps the weather might be mighty fine, and you shall wish to have a spontaneous jaunt out into the wild, in same sort of way as you would fancy a spontaneous take away or go out for a meal with you better half…

I personally know, that each and almost every year, I shall be going over the ditch on a week (possibly two) long jaunt, which on average would see me covering 200-250 miles a day. I therefore know my rough mileage for the trip that year. I then throw in another 1000-2000 miles for other local jaunts or even spontaneous weekend away over the ditch. This is the information I provide to my insurer. If I was to go over by a 1000 kicks, how was I to know I‘d be doing them? Over declaring your presumed mileage, sees you as a higher risk rider or a driver, in same way as you would be, if you were to declare that the vehicle would be used for commuting, thus putting you even further into a higher risk category. This in turn would only increase the cost of your premium.

Now I would never lie to the insurance company, but equally, I can not perfectly predict my year ahead. After all, I might just drop dead the next day. If you were to declare 3000 miles, knowing full well that you shall be riding 10000 of them, then yes, you have premeditated reason to mislead the insurer in order to save some cash.

Misleading your insurance company, would only lead to the worst outcome for you, should you need them at the worst possible time.

 

[EVskiy]

Who are we speaking to when we ring up then. I only ask as you seem to know the subject and I had recent run in with the RAC and the Financial Ombudsman stated that they're an insurance company that underwrite their own policies and their product/service is not regulated.

I Shall declare this early, I am no expert in the field.

Your insurance “company” is likely to be a broker, who is partnered with a number of insurers, who have agreed to a set terms of business, to sell X amount of policies in a given year. The broker is a business, who’s interest is to make a profit, to sustain itself. they will never tell you all the ins and out of their business model, yet they must conform to a set of regulatory rules.
I the event you need to speak to ”your insurance company”, you would be speaking with your broker first. You may get a call/letter from your insurance underwriter, to inform you of the proceedings with regards to your claim. However since you have purchased you policy from a broker, your business and any mediation would remain with them.

This is my understanding and experience that I have had with “insurance companies”

 

[Wapping]

Who are we speaking to when we ring up then. I only ask as you seem to know the subject and I had recent run in with the RAC and the Financial Ombudsman stated that they're an insurance company that underwrite their own policies and their product/service is not regulated.

Indeed, there are entities, who own insurance companies, for example the RAC who might well write breakdown / recovery insurance or even some motor. But, 99 times out of 100, you’ll be talking to an RAC branded call centre (acting as agents for the insuring entity) who might as well be selling cosmetics or wallpaper. You, very rarely, talk to the underwriters themselves.

Then you have the likes of Carol Nash, Devitt, Adrian Flux etc who are nothing more than a call centre, working off a pre-agreed set of terms, provided to them by maybe five or six different insurers. They might well call themselves ’brokers’ but anyone could do it with the appropriate licence, a list of questions and premiums. Ask them for something that is not on their playbook and it’s “I’ll put you on hold, whilst I speak to the underwriter“. They then message the insurer, who might even be in another country or they go and make a cup of tea.

A broker I worked for set up one of the very first call centres. The chimps sold Kawasaki branded insurance (their screen went green) and stuff for Boots, the chemist, where the same screens went blue. I forget who the insurer of the Kawasaki scheme was, NIG or Cornhill perhaps; it certainly wasn’t us or the call centre monkey.

If you are misold a policy, the FCA will go after the entity who did the selling. In your case, it was probably an RAC call centre.

 

[Snaf]

Indeed, there are entities, who own insurance companies, for example the RAC who might well write breakdown / recovery insurance or even some motor. But, 99 times out of 100, you’ll be talking to an RAC branded call centre (acting as agents for the insuring entity) who might as well be selling cosmetics or wallpaper. You, very rarely, talk to the underwriters themselves.

Then you have the likes of Carol Nash, Devitt, Adrian Flux etc who are nothing more than a call centre, working off a pre-agreed set of terms, provided to them by maybe five or six different insurers. They might well call themselves ’brokers’ but anyone could do it with the appropriate licence, a list of questions and premiums. Ask them for something that is not on their playbook and it’s “I’ll put you on hold, whilst I speak to the underwriter“. They then message the insurer, who might even be in another country or they go and make a cup of tea.

A broker I worked for set up one of the very first call centres. The chimps sold Kawasaki branded insurance (their screen went green) and stuff for Boots, the chemist, where the same screens went blue. I forget who the insurer of the Kawasaki scheme was, NIG or Cornhill perhaps; it certainly wasn’t us or the call centre monkey.

If you are misold a policy, the FCA will go after the entity who did the selling. In your case, it was probably an RAC call centre.

Begs the question of who did we speak to before call centres, I don't suppose that we've ever spoken directly with underwriters.

 

[Wapping]

That’s right.

It’s always been pretty rare that the general public talks directly to underwriters. The insurance companies (Aviva, Royal Sun Alliance etc etc) worked out long ago that it was cheaper and more efficient for them to distribute (market and sell) their products through brokers, agents (the man from the Pru, to use the classic example) and then, with the march of technology, through or via the online sales platforms, comparison websites, call centres or whatever.