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Insurance charging rest of premium for No Fault Claim

Discussion in 'Politics, Laws, Government & Insurance' at netrider.net.au started by craigrider, Aug 9, 2010.

  1. Ok so a bloke pulled out of a sidestreet in front of me and wrote off my bike. I put a claim in thru my insurance for them to chase the other guys insurance for the money. It wall all just approved and they have taken my bike only to tell me that I have to pay out the rest of the year's premium but no excess to get my money! The insurance lady is telling me this is normal for any total loss claim, even a not at fault one.

    Has anyone else had any experience with this?

  2. The PDS of your insurance policy would be one place you could have a look. No experience with your actual question though.
  3. That sounds right to me.

    Insurane companies base their premiums and risk based on 12 month policies.

    If they let you pay by the month you still owe them the yearly premium.

    The other option I guess is they could prorata your payout based on how many months you have paid.
  4. As above. Premium is an annual charge. Spreading it over the year isnt the same as paying "month by month".
  5. I understand that being the case if I was at fault, However the insurace company has been in contact with the other parties insurance company and they have admitted fault, it is a not at fault claim, I have not payed the excess and the insurance company will be getting all the money back from the other company.

    Why in this case are they charging me the rest of my premium?
  6. The premium is different to being charged an excess.It has nothing to do with a determination of fault. Lets say your premium is $120. So they agree to take $10 per month. Now you have claimed on the policy and, as the bike is a write off, the policy will be cancelled so the remaining unpaid portion of your premium is now due in full. Its not a punishment or fine or whatever. They are just collecting the unpaid amount that they are due. If they didnt have a monthly option you would have already paid it all up front.
  7. It's the way it works I'm afraid. You take out a yearly premium and that is what they expect to be paid.

    They have done the right thing by you, they have chased the other driver and got their money which has saved you the excess.

    Also they are paying you the full amount you were insured for. The no fault part doesn't matter. They pay you the full amount insured and they get the full premium they are owed.
  8. but if you cancel a policy mid-year, you get your money back, pro-rata on the unused portion of the year. So I would think (but haven't experienced this so dunno what fine print says) it would be similar. That you would be expected just to pay up to the time the bike is written off?

  9. I understand that sprinter, but if I did not have the crash and cancelled the insurance I would not have to pay out the rest of the monthly premiums for the year.
  10. When you cancel the policy that is different. They refund the unused premium and you walk away. You are not asking them to pay for the bike. In this case the OP is claiming not cancelling.
  11. Just cancelling a policy is not the same as a policy being finalised due to being paid out.
  12. I dont understand why your insurer would charge the rest of the premium, it would make sense that they transfer the remaining insured period to your new bike, or pro rata refund the amount back - since you are being paid by the other party's insurance company, not your own.

    Which insurance company are you with?
  13. I am with Swann insurance, the way that it was explained to me is that it is standard practice for them to charge the rest of the premium in the case of a total loss even in a no fault claim, and that this is standard practice for all insurance companies.

    She also said that I could chase the other insurance company myself and negotiate with them for a payout directly, then I could cancel my policy and save the $281 they want to charge me to pay out the premium, However I have an agreed value of $3500 with swann and the other insurance company is likely to pay me market value which may be less or more depending on the circumstances.

    Any suggestions on what to do?
  14. Swann is right it is standard practice. If you think they are wrong go to the Ombudsman and show proof that what they are doing is against the PDS.


    Pay the $281 and go bike shopping with the rest.
  15. So Moto2 you wouldnt have a problem with being $281 out of pocket as the result of a accident that was not your fault?
  16. It's not a matter of being happy. It's the way insurance works. You pay the premium to be covered for a accident.

    You seem to think you are entitled to a full level of cover for a discounted rate. The insurance company have done their bit and now you must do yours.

    Chase the other driver for the $281 dollars.

    If it was me I wouldn't be unhappy because I would have known what was going to happen when I made a claim.
  17. The insurance company has paid you out for the risk you gave them a premium for.They have fulfilled their side of the contract and now expect you to do the same. You arent out of pocket you already agreed to give them the money. I understand your viewpoint but its not how it usually works. If you want to argue it out with them you will have to find somewhere they have breached their agreement with you.
  18. You are paying for your insurance by the month, you aren't insuring your bike by the month...

    There is a difference. You've bought a years insurance and they've allowed you to pay for it monthly. If you'd been insuring your bike by the month the payments would have been much higher.

    It may not seem fair to you but in reality it is.

    You bought a years insurance against your bike getting stuffed, it has and they will be paying you out, unfortunately you just haven't paid for it yet.

    Makes sense.
  19. your paying $281 for them to do the leg work to get the other insurance company to pay out. It's a god awful pain in the arse to deal with some companies, especially when your trying to get money out of them. If you want to do the leg work, cancel your policy, and do the work yourself.
  20. You can look at it as being payment for a service for processing the claim with the other insurance company, all legal costs are taken care of, a much quicker time frame for a payout, and a payout that is better than market value. Or you can engage a solicitor or do it yourself, either of which will probably take longer,cost you money up front, and/or reduce the payout.

    Is you damaged riding gear inlcuded in the claim? Make sure it is.

    Read the PDS, it may help you negotiate with the insurance company to put the $281 or part of it toward your new policy.