We have a MVI policy that has just entered its third year, and the customer has paid in full on three invoices. My customer has realised they are insured elsewhere also since inception and requesting to stay with the other insurance company.
Am I obligated to refund 100% with the other insurer keeping 100% of their premiums, or should this be 50% of premium return?
The third-year policy has only just started so my suggested offer will be for a 50% rebate/refund on year one and two and a full refund on year three.
I would appreciate any advice.
Reply: Crossley Gates
You are not personally “obliged” to refund anything. You may not have meant it that way, but assuming you had no knowledge of your client's insurance elsewhere, it is important for you to understand that as a professional adviser, you have done nothing wrong.
Through no fault of your own, your client has ended up double insured. You can, of course, approach the insurer you placed the business with, on behalf of your client, to see if they will entertain a full or partial refund. However, they may not be legally obliged to do so. Depending on the double insurance clauses in the two policies covering the same vehicle, that insurer may have remained exposed to 50% or even all of the risk, despite the second policy.
I suggest you explain the position to your client, take instructions and then approach the insurer about a refund if requested.
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