The Insurance Company's Rights

Once you are insured, the insurance company may have certain rights over you such as:
• the right to initiate proceedings against you in the name of other insured drivers
• the right to settle any claims made against you by other insured drivers
• the right to recover from you any outlays they are legally obliged to settle that go beyond the terms of the insurance policy
• the right to require evidence of your ownership of the car in the event of a loss
• the right to reimburse only the legal owner of the car in the event of a loss.

The regulators, and your rights as the customerI consumer.Until recently, there were no regulations governing the margins insurance companies charged for their premiums. For instance, if you phoned a car insurance company for a quotation, the consultant or agent at the other end would generally ask for the cheapest price you have been quoted so far and then offer to match it or marginally better it.

Even if there were other cheaper prices coming up on the agent's system, he would not go any lower but try to sell you the policy of his company at a price that was just under the best price you had received so far.
This meant that the insurance company always exploited the potential customer in rr to maximise its profit margins.

From January 2005, however, all insurance companies have to be FSA compliant. They have to abide by the rules and regulations of the Financial Services Authority. These rules and regulations require them to be more open and factual about the terms of their policies. Companies that do not comply face the ultimate sanction of being forced to close down.

Remember that once you have taken out car insurance, you have entered a legally binding contract and you cannot come out of that contract without paying a penalty (see section on 'insurance termination'). The only circumstances in which you can have your insurance contract terminated without penalty are:

• when policy term is finished
• during the 14 day cooling off period from the date you received a quotation or a reminder or a renewal notice
• there is an accident and the car is written off, or the car is stolen and not recovered
• you have sold your car.