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Hidden Dangers of Paying for your Car Insurance by Direct Debit

By bombheads12  |  Posted: May 30, 2012

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Yes Ive been told by the Insurance people that newspapers know this subject but here goes


Paying by direct debit monthly can seriously affect your claim should you write your vehicle off


For Example as a youngster you Insure your vehicle for say £2000 (what you paid for it at the forecourt) when you buy insurance they ask what value of the vehicle is you say £2000

They explain that excess will be say £250 and payments will be £80 per month by direct debit or £750 for complete year.

Now most people I have asked at work pay by Direct Debit

Here comes the crunch (taking the pun) 3 Months passes and then

You crash your vehicle and it becomes a total write off as the Insurance assessor says vehicle is only worth £1000

A call from your Insurer says when you claim "well that's £1000 minus £250 leaves £750 oh and by the way the REST OF THE POLICY MUST BE PAID FOR !  so 9 x 80 = £720 that leaves you with £30 in total for your loss of vehicle ( luckily you weren't injured and in hospital for weeks)

Almost everyone I have asked at my workplace that includes over 500 people pay by Direct Debit in these times of Austerity who has large amounts of spare money lying around to pay for Car Insurance

Just to add salt into the wound, this is on a "Fully Comprehensive" Insurance Policy and the Insurers have promised if I don't claim they will give me the lowest quote for my new vehicle.

I know they have to make a profit but this is makes Car Insurance a mockery, no wonder a lot of people drive without insurance.

This I believe needs Addressing


p.s. Have you looked at your policy ??

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  • Droofguy  |  May 30 2012, 2:13PM

    Another something and nothing story, must be a slow news day.....

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  • SmokieJoe  |  May 30 2012, 1:50PM

    I don't know of any policies that would allow you to make a total write off claim then transfer the insurance to another vehicle. It would be a new policy altogether. The issue is with how the vehicle was assessed for value, i.e. paid £2000, assessor stating £1000. The argument would have to be what can reasonably be expected to pay for a similar vehicle at the time in your area, and was the value you gave representative of that as I understand it.

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  • sandyshaw  |  May 30 2012, 12:00PM

    Even if you pay a lump some upfront its still the same, you dont get it all back if you end your insurance early. So it's not a matter of how you pay. Unless I misunderstood you. The best thing you can do is get another car as soon as possible and transfer the cover. This way you will get £750 and keep the direct debits you had planned to pay anyway. So in effect the insurance is working as it should.

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