# Motor insurer wont pay large claim due to penalty points non-disclosure



## shaneo (30 Sep 2006)

Hi All

I need some advice if possible as to my next step with regard to the following.

I crashed my car in August, I was deemed to be at fault, I spent 2 weeks on life support, I have no memory of the accident. A truck was written off to the value of 50,000 and my insurance co. paid this.

My car was written off, I had fully comp. and expected to paid, but have now received a letter saying i will not be paid my sum of 16,000 due to non-disclosure of penalty points.

I received 4 points in Jan this year due to 2 speeding incidents (both 70 kph in a 50 kph zone).

I sold my car in May, which was much more powerful than the one I crashed, and expected to receive a reduction in my insurance premium ( which was then about 1000) when it was due in June. I received a renewal notice, with roughly the same premium on it, and rang my insurance broker to ask for a reduction since I now had a less powerful car. 

I then received a second letter saying I now was offered insurance with a different company for about 500, and to ignore the letter asking for 1000 from the original insurance co. 

I accepted this, paid up, and that was it. There was no mention of penalty points at all, I did not even think of it, and they did not ask if I had any now. If I had been asked I would have told them.

After the accident I received a letter asking to state how and why I now had penalty points, and I wrote explaining all. Now I have the letter saying I will not be paid the 16,000.

Should I pursue my broker who failed to say a word about penalty points, or the insurance co. which wont pay, and who also didnt mention points. Will an ordinary solicitor do me or do I go to the ombudsman. Or any other advice. Not sure if this post should be in the Legal Section.

Thanks for any help


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## ubiquitous (30 Sep 2006)

Unless you have deliberately changed some of the details above in order to obscure your identity, it may not be a wise move for you to publish the details of your case here. I'm no expert on the laws governing insurance but as far as I can see you don't have a leg to stand on. The dogs in the street know that penalty points have insurance implications, and that questions on penalty points are included on insurance application/renewal forms as a matter of course. I reckon you will only be throwing good money after bad by trying to pin the blame on others.


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## shaneo (30 Sep 2006)

As I said there was no mention of penalty points on any forms, or in any discussion at any stage whilst I was transferring to the new insurance company under the direction of my insurance broker


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## shaneo (30 Sep 2006)

And whats more is it didnt even cross my mind at the time


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## Eurofan (30 Sep 2006)

shaneo said:


> As I said there was no mention of penalty points on any forms, or in any discussion at any stage whilst I was transferring to the new insurance company under the direction of my insurance broker



Are you sure about this? While i sympathise with your situation i can almost guarantee the policy would state exlicitly that non-declaration of points would invalidate cover.

It's not up to them to ask if you have points the onus is on you to declare them, unfortunately forgetting to do so is unlikely to stand up in court.

Did you actually receive a policy? Have you checked carefully the terms and conditions within?


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## shaneo (30 Sep 2006)

I am certain that I did not receive a policy from the new insurer under which i claimed - my insurance was simply transferred by my broker from the old insurer to the new one.  also, i know that i would not tell lies on a form, so i think that i have case against someone.  i need to see a solicitor


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## shaneo (30 Sep 2006)

*Motor insurer wont pay due to "non-dislosure" of penalty points*

Hi All

I need some advice if possible as to my next step with regard to the following.

I crashed my car in August, I was deemed to be at fault, I spent 2 weeks on life support, I have no memory of the accident. A truck was written off to the value of 50,000 and my insurance co. paid this.

My car was written off, I had fully comp. and expected to paid, but have now received a letter saying i will not be paid my sum of 16,000 due to non-disclosure of penalty points.

I received 4 points in Jan this year due to 2 speeding incidents (both 70 kph in a 50 kph zone).

I sold my car in May, which was much more powerful than the one I crashed, and expected to receive a reduction in my insurance premium ( which was then about 1000) when it was due in June. I received a renewal notice, with roughly the same premium on it, and rang my insurance broker to ask for a reduction since I now had a less powerful car. 

I then received a second letter saying I now was offered insurance with a different company for about 500, and to ignore the letter asking for 1000 from the original insurance co. 

I accepted this, paid up, and that was it. There was no mention of penalty points at all, I did not even think of it, and they did not ask if I had any now. If I had been asked I would have told them.

After the accident I received a letter asking to state how and why I now had penalty points, and I wrote explaining all. Now I have the letter saying I will not be paid the 16,000.

At no stage did i give false information to anyone .  Penalty points was not on any forms.  Will an ordinary solicitor do me or do I go to the ombudsman. Or any other advice. I posted this in the insurance section also

Thanks for any help


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## Eurofan (30 Sep 2006)

shaneo said:


> I am certain that I did not receive a policy from the new insurer under which i claimed



That's very unusual (surely?), i have always received a policy document detailing what i paid, who it's for, what vehicle is registered and the terms and conditions under which it is insured.

You *must* have received such a document with the _insurance disc attached_, do you still have this document? I have just checked my own and it states in plain english that non-declaration of penalty points or other endorsments would render the policy null and void.


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## Swallows (30 Sep 2006)

*Re: Motor insurer wont pay due to "non-dislosure" of penalty points*

From my experience with *any *type of insurance, the onus is on the buyer to declare any information to the insurer which you think they should know. This would include any type of motoring offence, penalty points, criminal record etc. it's up to you to declare the information to them. You know perfectly well they wont pay out when you make a claim. It's the same with medical insurance, you have to declare every trip to the Dr. hospital, however trivial. House insurance the same. Even if they dont ask the question you know you should tell them anyway otherwise you are wasting your money buying insurance. I am only saying this because of my experience over the years insuring home, car, self etc. Sorry to hear of your accident.


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## Ravima (30 Sep 2006)

strange too that you were able to change insurer WITHOUT completing some sort of proporal form. 

non disclosure will unfortunately for you, result in non payment under the policy. You are lucky that they are not seeking recovery from you of the €50K for the truck.


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## orka (30 Sep 2006)

Not all insurance companies started penalising for pemnalty points as soon as they came in and some possibly still don't.  It does seem unfair that you would be penalised if you were not asked asked a specific question and/or did not sign ANY document stating that you had no penalty points.  In order to essentially prove that you broke your part of a contract thus enabling them to nullify part of it (the comp cover), they have to show that you knew or should have known from documentation received etc. that points would be an issue.  As Ravima says, there must be a proposal form somewhere - either direct from the broker to the company or from you to the company.  First thing I would do is asked for a copy of the signed proposal form and/or a copy of documentation sent to you.  I suspect the exclusion is buried in there somewhere but there is an onus on them to prove that they have the right to validate cover.


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## Murt10 (30 Sep 2006)

As far as I know all insurance policies are taken on by the insurer in "Utmost Good Faith". This means that you must disclose all material facts relating to the risk to be covered. 

If they didn't ask you about penalty points, did they ask you about endorsements? Even if they didn't ask, you were obliged to tell them anyway.

I'm also surprised that if they disallowed part of the claim that they didn't disallow the whole thing

Murt


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## orka (1 Oct 2006)

Murt10 said:


> I'm also surprised that if they disallowed part of the claim that they didn't disallow the whole thing


 
Under the Road Traffic Act, they would be obliged to pay the third party part of the claim - although as someone has already pointed out, they can seek a 'contribution' from the insured - whether they do or not depends on the circumstances  - and in this case, it is surprising that they haven't, given that they consider that the insured didn't disclose relevant info - there are no details given but for a car to do enough damage to write-off a €50,000 truck, there would have to be a suspicion of excess speed which is exactly the 'crime' which was not disclosed.


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## RS2K (1 Oct 2006)

I sympathise with your situation, and hope you are fully recovered from the crash, but a few things spring to mind:-

1/. It is not possible to simply transfer cover from one insurer to another. The old policy is not renewed and a new one effected.

2/. A new policy doc. must issue and your windscreen disc is attached to it.

3/. A proposal form (the basis of your contract with the insurer) is always needed. Cover would not have been available without one.

I'm wondering did your broker arrange cover, and fill in a paperless proposal on your behalf? If so did the broker know about your 4 penalty points? 

I'd consult a solicitor, as this has the potential to get nasty.


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## RS2K (1 Oct 2006)

orka said:


> Not all insurance companies started penalising for pemnalty points as soon as they came in and some possibly still don't.  It does seem unfair that you would be penalised if you were not asked asked a specific question and/or did not sign ANY document stating that you had no penalty points.  In order to essentially prove that you broke your part of a contract thus enabling them to nullify part of it (the comp cover), they have to show that you knew or should have known from documentation received etc. that points would be an issue....



I don't agree at all. They don't have to show non disclosure.

A basic principle of any contract of insurance is Uberrimae Fides (or utmost good faith). It means that there is an assumption in entering into the contract that all material facts would be disclosed by both parties.

Obviously penalty points a material fact, and the insured knew he/she had incurred them. It's therefore the insured's responsibilty to make sure they were disclosed. 

Game over.

However, if a broker filled in an incomplete or inaccurate proposal form, on behalf of a client, agency law may come into play.


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## bond-007 (2 Oct 2006)

I am amazed that brokers can get away with those paperless proposals. Surely something would need to be signed by the insured?


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## orka (3 Oct 2006)

RS2K said:


> I don't agree at all. They don't have to show non disclosure.
> 
> A basic principle of any contract of insurance is Uberrimae Fides (or utmost good faith). It means that there is an assumption in entering into the contract that all material facts would be disclosed by both parties.
> 
> Obviously penalty points a material fact, and the insured knew he/she had incurred them.


 
I’m not sure the insurance ombudsman would let an insurance company hide behind the wooliness of Uberrimae Fides as not all consumers can be assumed to have studied insurance 101. Why should it be up to an uninformed consumer to decide what ‘obviously’ should be told to the insurance company and what information can be withheld? For example, I sometimes speed but I have no penalty points – should I tell the insurance company or am I ‘safe’ because they have no way of checking? Borrowing from another thread, what about expired penalty points? Even old ones indicate a tendency to speed so should they be reported forever, even 20-30 years after expiry? I would love to see a case come before the ombudsman where the penalty points question wasn’t asked and neither was a catch-all ‘can you think of anything material we should know about that hasn’t been asked’. I think the ombudsman would come down on the side of the consumer – the insurance company should know to ask such an obvious question and if the consumer answered all questions honestly I can’t see the ombudsman asking him did he not think he was going against the concept of Uberrimae Fides.

That said, I think in this case, either the OP signed a proposal form without reading or the broker dropped the ball somehow in not asking for a full proposal form or renewal update form – I don’t think there are any insurance companies left which don’t ask about penalty points at renewal or when first taking out a policy.


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## ted (6 Oct 2006)

I wonder if the fault is not with the broker and insurer. It sounds like the broker answerered all questions on your behalf and the insurer must have known that they were not speaking to you. On the other hand, I would imagine that there is an obligation on you also to make sure that your insurer is made aware of any material fact that might affect it's decision to issue a policy or assess risk and calculate premium accordingly - ubberimae fides clause. I would think that there is reasonable grounds for claiming that the fault lies on both if not 3 sides (you, broker and insurer)and that the liability be spread 3 ways.


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## sheena1 (6 Oct 2006)

You expected a refund of some of the premium for changing to a less powerful car but did you not expect to have to pay more for having 4 penalty points? What do you think the purpose of penalty points are? Do you think if you don't tell your insurance about them they will be ignored???


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## bond-007 (6 Oct 2006)

I think the problem is that most insurance comapnies don't penalise you financially for 4 points. That's why some people don't bother telling them.


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## RS2K (8 Oct 2006)

orka said:


> I’m not sure the insurance ombudsman would let an insurance company hide behind the wooliness of Uberrimae Fides as not all consumers can be assumed to have studied insurance 101. Why should it be up to an uninformed consumer to decide what ‘obviously’ should be told to the insurance company and what information can be withheld?
> 
> Oh yes he/she would. It is one of the basic principles of contract law, applied to insurance. If somebody filled out a proposal form properly and answered all the questions fully and accurately I don't see a problem. Ignorance is no excuse.  Try telling a court of law that you never knew a law that you'd broken existed.
> 
> ...


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