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My insurer raised my premium by 130 per cent - can they do this if I never made a claim?

Last year someone bumped into the back of my car. Initially, he wanted to process a claim, so I informed my insurer, but he then decided not to claim. He paid me for the damage and no claim to any insurance company was made. A year later my insurance company jacked up my insurance by 130 per cent. When quizzed, they said it was because I had a no fault "incident", not a claim. Thankfully other insurers didn't take this view, especially with 12+ years of no claims. I've heard that if you are claiming for a no fault claim then it's better to use an intermediary or a private claim, is this true?

Asked on 2 February 2018 by zuluboy

Answered by Honest John
Yes, it is because you have two sets of entitlements. One is under contract law (i.e. claiming through your own insurer), and the other is under the law of "tort" (i.e. you have been wronged in some way and have the entitlement to claim compensation for the losses you have incurred). These two are very different things and you may not receive your full lawful entitlement to the loss you have sustained should you claim via your own insurer. Your insurer is bound by the Financial Service and Markets Act 2000 to abide by the Financial Conduct Authority regulations. The regulations that apply to this situation are ICOBS 8.3.3: www.handbook.fca.org.uk/handbook/ICOBS/8/3.html

The insurer should not act in conflict to your interest and should advise that they decline to act if they know they would, although they never do. This is why I suggest using someone who does not have a commercial interest in your claim like the Association of British Insurer's General Terms Agreement (ABI GTA).

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