Sunday, 23 September 2012

A word of warning

I don't usually comment on "real life" issues within my blog as I use the blog primarily to chart and record my painting/modelling work. However my Father asked me an insurance question earlier today and I decided to share my view here as well. I should preface by saying that nothing that follows should be considered legal advice and you should not base a policy buying decision solely on what I say. Now having covered my own back I will plow on.

Those of you that know me may be aware that I occupy a reasonably senior (technically speaking) position within a large Loss Adjusting firm in the UK. Therefore my Father asked my opinion regarding a "Mechanical Breakdown" policy which the garage that he had bought his second hand car from had recommended to him.

For the uninitiated policies of this nature are sold on the basis of covering certain (unsurprisingly) Mechanical failures within your car.

However most of the policies have a number of very important clauses and wordings which are highly specific and exclude most of the items which you would probably wish to claim for. Obviously I cannot comment on every single policy of this sort, but generally speaking, in my experience,  most of these policies have wordings which allow Insurers to decline cover on the basis that the Mechanical Breakdown in question has occurred due to normal "wear and tear" of the vehicle.

Additionally a large number of mechanical issues are specifically excluded within the wording, and you may not have expected them to be. This can include your engine block cracking, failure of oil seals, and other similar issues. Equally if your Clutch or Gearbox fails the Insurer can, most of the time, decline cover citing "wear and tear" as the cause of the failure.

Lately I have noticed Garages pushing these policies, which I presume they are collecting commission on, and specifically a garage incorrectly indicated to my Father that the policy covered most mechanical breakdowns.

What I say to anyone, who has bothered to read my industry rambling, is to consider these policies very carefully before buying them. Do not listen to the Garage who tell you that the policy is good and covers this or that, as they probably have next to no knowledge of the policy. Ask them to point to the specific wording and ask lots of questions. Read the, albeit boring, policy booklet cover to cover and make notes if you want to ask more questions. Make sure YOU understand that limitations of these policies.

Personally I believe these policies are not worth the paper they are printed on and provide close to no effective cover, or I should say they do not provide the cover that an average punter will expect them to.

 But as I said above, I am not giving legal advice, just read the policy bloody carefully and if necessary phone an independent broker and ask them to explain the cover properly.

Right I'll stop boring you all now. Cheers.


  1. Very good commision it will be as well. So many of these policies are just not worth it. Better to put the premium away each month at least then you have something! Will these be the next PPI type that keeps bottom feeders of the legal world in G&T's?

  2. Have to say I'm surprised that these policies have not been picked up on a miss selling basis, garages are pushing them and they cover pretty much sod all. Wouldn't surprise me if these end up being the next "get back your PPI" type of thing.