Money clinic: refund for unused travel cover

if your holi day was cancelled by the company, then your insurance co. is quite right to refuse.
you are automatically entitled to get your money back from the travel company. although it may take ages to get .
otherwise you would be getting paid twice.

David – I can understand your annoyance, but insurance, especially motor insurance [including breakdown cover], is an extremely competitive market with a high turnover of policy holders. Because the basic covers are more or less standard across all policies, in order to attract new business, insurers find other ways to compete by tweaking the terms and conditions to offer something extra or to lower the premium. It is essential, therefore, to study the terms before accepting a policy to make sure they give the cover you want, including on conditions such as early termination, change of address, change of vehicle, and so on.

Breakdown cover is not strictly insurance but a service contract which is designed to be rolled over to another vehicle but not designed to be cancelled. You might have found a different breakdown service contract without the ‘no cancellation refund’ clause, but would it have been the same price or have other adverse conditions? I am afraid that if a restrictive provision is set out in the policy or contract document the customer is deemed to have read it and accepted the terms and conditions.

You praise NFU Mutual motor insurance. It is not noted for good value but is well-regarded for customer service. However, its claims handling has been shown to be unsatisfactory in some cases and a particular experience reported on this site was that the insurer wouldn’t go the extra mile to support a loyal customer.

I’m not sure you are right about European breakdown cover not being insurance. Maye domestic cover is just a service but the European product is different. The documentation for the product is very clear that is very clear that it is an insurance policy underwritten by an insurance company. Refunding pro rata premiums is a very standard feature of term insurance and if an insurance provider is going to divert from the norm then the ethical thing to do ( and the AA has long held itself out as an ethical provider) is to prominently alert consumers to non-standard and oppresive terms. I think it was Denning LJ many years ago who referred to some terms so dramatic that they should be highlighted in glowing red letters ; or words to that effect.

Their approach when I questioned the policy terms was also poor; quite unwilling to engage in any discussion. A meaningless apology which translated as ‘that’s tough; put up with it’.

As for NFU, if by good value you mean cheap then I have to agree. And I think they acknowledge this . But the whole NFU proposition appears to be to handle things a bit out of the mainstream in a personal way – not simply turning the handle on an automated sausage machine. I found them exceptional and able to deal with the proposition in front of them on its own merits rather than responding ‘computer says no’. They handled a high value motorhome, privately imported, with a second driver holding a European licence without a hitch and were creative in finding best options for premium and cover. I found them exceptional, the best insurer I have ever dealt with. When I had a claim that needed to be handled abroad they were helpful in sorting it out.

The AA regard what they offer as an insurance.

My son took out NFU car insurance. His car was stolen and the same day they provided both a courtesy car for 2 weeks and money to replace the child seat. The claim for the car was then settled quickly at a very good price after a little negotiation; worth doing your research by checking the dealer price for the same car, similar spec and mileage. So on that experience I’ll give them top marks. In his case and mine they also gave very competitive quotes – not maybe the cheapest but I think you get what you pay for. Cheap insurance may make you road legal but the test comes when they have to pay out.

David – Yes, I agree that breakdown cover is in fact a form of insurance. It protects you when something breaks down and provides different levels of cover according to the policy terms. Pay-outs on eligible claims are not limited to the amount paid as a premium – initially at least. The policies are also liable to insurance premium tax and the companies providing the cover are subject to regulation by both the Prudential Regulatory Authority and the Financial Conduct Authority. Nevertheless, they are free to determine their own terms and conditions within the scope of the law [which includes not having unfair contract terms].

I agree that the AA could have been more open about its cancellation terms but I don’t regard them as either exceptional or oppressive. I don’t think there is a norm although partial reimbursement in the event of cancellation might be the more common approach.

I agree with Malcolm that you certainly get what you pay for with insurance. I have used many different companies over the years and, as Malcolm says, the test is in the handling of claims. It is over forty years since I last made an insurance claim so I am in no position to judge nowadays. I tend to choose a mid-range and long-standing insurer, exclude many covers, and set high excesses, so to some extent I am self-insuring based on my own assessment of everyday risks.

There are hundreds of motor insurance companies, many of them not represented on comparison websites, so it is a formidable task to evaluate all the policies available. A good broker can assist and will probably know of more suitable insurers for specific or specialised requirements.

David – I agree with you that it unacceptable for the AA to take eight weeks or longer to respond to a complaint.

When taking out insurance or breakdown cover it is important to look at the terms & conditions. I am fed-up that none of the well known breakdown companies offers a no-claims discount, but I just have to accept that. The best value breakdown cover I have found has been to include it in my motor insurance and at present I am insured with NFU Mutual. It is important to compare the cover provided, but with only one car it is good value for me. I had a claim more than a year ago and I cannot fault the way that it was handled. Like Malcom’s son, I was provided with a courtesy car, delivered to my home when my car was collected for repair, and taken away when my car arrived home.

As John has mentioned, one of our regular contributors has been poorly treated by NFU.