Summary:

When it comes to car insurance, one of life's important rules is to put things down in black and white. It's all too easy for mistakes to happen - as one 19 year old knows only too well.

Car Insurance. Always Put It In Writing

Maybe there should be a "Car Insurance for Beginners" published. Maybe there is one already? Whatever the cause, car insurance was a bit of a mystery for one 19 year old recently.

Basically, this was the case of a 19 year old, planning to go off to University later this year. Last June he managed to get together enough money to get his first reasonable car and by using a two year no claims bonus, received and accepted a quote of around 1,000 pounds, which he accepted as reasonable in view of his age. He was going ahead with this quite happily when he ran into problems with his previous insurer which meant that he couldn't retrieve his no- claims bonus proof. He explained the position to the new insurer and they agreed, over the phone, that the policy would be cancelled and they would bill him for around 100 pounds, which he agreed to.

This seems quite straightforward, but what has happened recently is far from what was promised. He had a call from a debt collection agency. They said there was a balance of 1,800 pounds on the cancelled policy. A conversation took place in which the youngster says he made it quite clear that he couldn't pay that amount and indeed shouldn't have to, as an agreement was made at the time of cancellation. He was then told that they could make him bankrupt if he didn't settle the account.

Concerned that he couldn't settle the account, worried because he couldn't prove that the telephone conversation regarding the refund actually took place and indignant because he felt that what the insurer had done was not right and may be illegal, he asked for advice on how to handle the matter.

The first thing to have done should probably have been to speak to the insurer's customer services department. It's quite probable that there has been a mistake and the action should never have been initiated. It's also possible that they have a recording of phone conversations. A letter of cancellation and a copy of the same would have resolved a lot of problems - was there such a letter? The best thing now is probably to contact them, making a note of the name of the person you're speaking to always helps and noting the time and date of the conversation. Explaining that you're feeling very concerned at the issue with the debt collection company and asking for their help in sorting things out as soon as possible should gain their attention and sympathy.

It's really not logical that the debt collection agency would take the action of making a 19 year old bankrupt. Not many 19 year olds have substantial personal assets and it's a good guess that not many are home-owners either. It seems highly probable that this has just been the result of a mix up in communication and it will be sorted out without delay.

If there are still problems, it needs sorting out as in the extremely unlikely event of bankruptcy it could result in problems with getting credit in future years, to the extent of affecting any credit card or mortgage decisions. A local Citizens Advice Bureau will be able to help and the financial services ombudsman is there to look into any complaints.

Remember, get things in black and white. Follow up any telephone conversations with a letter and keep a copy. Always ask for names when dealing with people on the phone.

Readers please note : You should undertake your own background checks before taking any action on any aspect mentioned in this article. Where the author has mentioned specificproduct details or given examples of how companies have reacted to specific situations,these should be correct as far as the author is aware when this article was written. In some cases additional background information not mentioned in the article has been used in obtaining the examples. Some examples or quotes may have been taken from information available in the public domain where all the background details may not be available.Insurers do change policy conditions and underwriting approach. They will view each situation on its own merits.

You should be aware that details of the topics written about within the articles can change.Therefore, always check out the current position before taking any action. You should also check that any action you are considering, or any proposed purchase, is suitable for your personal circumstances.

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