I had a client in today who related the following tale...which he agreed to let me post up....
He is 19 years old, working full time and living at home with mum and dad. He bought himself his first car, an oldish Ford Fiesta 1.25 Zetec and went shopping for insurance....his best quote was Ã‚Â£3918 -bearing in mind the car was worth about Ã‚Â£500 - strangely, it was Ã‚Â£30 cheaper to be fully comp than Third Party, Fire and Theft. He was paying this in instalments unsurprisingly!
Two months down the line he came round a corner too quick and into a pig pen (rural Lincs). This was witnessed by another motorist who promptly called the police...no one hurt and no other vehicles involved. Police duly arrive and check his insurance but presumably their systems were down so they did this by phoning his insurance co. and telling them he had been involved in an accident. The lad would not have informed them himself owing to the value of the vehicle and losing future NCD etc.
Insurers less than promptly send a recovery vehicle from over 100 miles away to recover the car to their compound for inspection, the lad having been told 'he might as well claim on it'.
Assessor looks at car and finds he has snapped off two engine mounts and car is beyond economical repair....fair enough! Of course the insurers then tell the lad that his voluntary excess of Ã‚Â£150 and his under 21 loading of an additional Ã‚Â£400 means that he will get nothing for the car....HOWEVER, now of course he has made a claim so what happens next? Firstly he is informed he can transfer his insurance to a new car.....he duly buys a Fiat Punto 1.2, then they tell him that this is more expensive to insure...but not only that, it takes him beyond a Ã‚Â£5000 'insurance cost limit' which is not permitted on one policy...so he'd have to buy another policy.... at this point he finds insurance elsewhere for much cheaper..so he thinks...and takes out a new policy and rings to cancel his old policy. Unfortunately he is then told he cannot cancel it because he has had a claim and therefore has to pay the entire year's premium - as per their policy schedule of course!
So, the upshot is that he has an insurance policy for which he has no car but is obliged to pay the remaining Ã‚Â£2k premium because he made a claim, which gained him nothing whatsoever and cost the insurers the price of a towtruck recovery.
Moral of the story for new drivers: Always read the small print...and be VERY suspicious if fully comp is cheaper than tpft!