Car Insurance

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In news you may have missed, Kwik Fit Insurance are in a pickle after a major balls up by their admin system let over 800 drivers get insurance policies they should never have been entitled to.

Rather than bearing the cost of their own mistake, they decided to cancel all of the affected policies with just 7 days notice and a measly £25 goodwill payment. Then they offered to reinstate the policies at up to 3 times the price. Understandably that kind of behaviour is a short cut to a lot of annoyed customers.

It looks like several disgruntled policy holders will be taking their complaints to the Financial Services Authority and Financial Ombudsman Service. The ABI (Association of British Insurers) also made a comment that “Unilaterally ending a policy in this way could be a breach of contract.”

It does seem a very shoddy way for the boilersuit brigade to treat their (former) customers for an underwriting mistake of Kwik Fit’s own making. Perhaps they should stick to changing exhausts.

  • Anonymous

    >as kwik fit is an intermediary if one of their underwriters changes THEIR terms and condition NOT kwik fit then to make sure that clients are fully insured then Kwik fit will need to change the customers policy. What i want to know is out of the 800 policies how many were more than 3 times the price, if the customer has had a claim before the policy was changed then that price is based on the new risk therefore the increase in premium. if 800 policies increased in price wouldnt there be alot more than one messley moan.

  • Dave Wilson

    >Wow! This event was nearly two years ago now. The error was Kwik Fit’s – their underwriting system created a similar screw up to the one that Hastings had.

    On the face of it it is hard to see what the difference is with the Hastings case, which led to a massive fine from the FSA. The only significant thing I can see is that in the Kwik Fit case, the risks were (technically) fronted – that is young drivers appearing as named drivers on a parent’s policy, when the parent in fact drives another car, and the young driver is the most frequent user of the vehicle on cover.

    Given this scenario, requotes at double or three times the original quote would certainly not be unlikely.