Dec 6 2017

My son was penalised over LV car insurance premium #house #and #contents #insurance

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My son was penalised over LV= car insurance premium

Based on my recent experience of arranging insurance for my son’s car, I think it’s time for an inquiry.

He is 20, has held a full licence for two years and has one year’s no-claims bonus. He is studying at the University of Bradford and needs a car to pursue his sport of wheelchair basketball. He attends training and matches several times a week in Sheffield and all over the north.

Last year he took out a policy for his Skoda Fabia (Group 1 insurance class) with LV= and, on condition he kept the car in the secure car park at the university, his premium was 2,500. At the end of the first academic year he moved back to rural Suffolk, where he was living when the renewal notice arrived. The premium was 600.

However, the renewal date coincided with his return to university. When he told them, the premium became 1,800. This was as expected from earlier quotes received on line from LV=. However, when I phoned to pay the next day, I was told that there had been a mistake and the premium would, in fact, be 4,300.

The only justification LV= could give was that the postcode where the car would be kept had been re-graded and the revised premium was what the underwriters insisted on.

It is not credible to claim that his risk of inflicting third-party damages is seven times higher in Bradford than in Suffolk.

Nor is it credible to claim that the risk of damage to his own car is seven times higher in Bradford, especially when the car is worth less than 1,000 at the most.

It seems that there is a policy of penalising young drivers in order to subsidise the premiums of the older majority. My son needs a car to pursue his sport. His disability does not qualify him for any assistance from the disability living allowance and hence he gets no support towards his mobility. MN, Suffolk

Having been through your case in detail we think you make some very valid points. However, it seems that it is not just young drivers who are being discriminated against, but anyone who has the misfortune to park their car in Bradford every night.

We asked LV= to explain the figures you were quoted, and got some answers at least. It says that last year’s premium of 2,500 applied when your son first moved to Bradford.

An admin error at that time led it to be artificially low – if 2,500 can ever be considered low.

The insurer couldn’t really come up with an adequate explanation as to why this year’s quote leaped from 600 to 4,300 as a result of moving 180 miles – except to say that all the claims data is much higher in Bradford than Suffolk.

What you may not be aware of is that Bradford is the UK’s whiplash capital and that may be the reason the premium has been super loaded. However, even after that is taken into account, it’s extraordinary that his premium rose by so much.

For several months now this column has argued that the UK car insurance market is dysfunctional. Last week the The Office of Fair Trading said it had asked the Competition Commission to investigate the market, after concluding insurers were inflating costs by 225m a year.

It may not be in its remit, but the Competition Commission could do worse than look at your case in detail.

Happily, we do have some good news. As a gesture of goodwill, and to make up for the original error, LV= has said it will now honour its original 1,800 a year quote – for one year only – a generous saving of 2,500.

This gives your son the chance to add another year of no claims bonus which should help next year when you will have to shop around. As an aside, it seems extraordinary there isn’t help for disabled students/athletes to help pay costs such as these. Does anyone know of any possible

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