Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Ant555
    • By Ant555 5th Dec 17, 10:51 AM
    • 729Posts
    • 281Thanks
    Ant555
    Temp cover - 12 months policy then cancel?
    • #1
    • 5th Dec 17, 10:51 AM
    Temp cover - 12 months policy then cancel? 5th Dec 17 at 10:51 AM
    I am looking for temporary (occasional use) car insurance for my daughter for around 7 weeks over christmas and it might be that the cheapest option is to take out a policy in her own name on my car and cancel just before 2 months is up.

    Does anyone know if cancelling a policy will have any future implications for her - or even me if its against the car? and if I decide to go down this route then I guess paying monthly is the better option rather than upfront and claim back?

    Any advice on any pitfalls to avoid are welcome.
Page 1
    • wongataa
    • By wongataa 5th Dec 17, 11:07 AM
    • 1,149 Posts
    • 629 Thanks
    wongataa
    • #2
    • 5th Dec 17, 11:07 AM
    • #2
    • 5th Dec 17, 11:07 AM
    There are no issues if the person who takes the policy out cancels it. The problems happen if the insurance company cancels it.
    • mgfvvc
    • By mgfvvc 5th Dec 17, 12:43 PM
    • 231 Posts
    • 98 Thanks
    mgfvvc
    • #3
    • 5th Dec 17, 12:43 PM
    I would not want to do that
    • #3
    • 5th Dec 17, 12:43 PM
    I am looking for temporary (occasional use) car insurance for my daughter for around 7 weeks over christmas and it might be that the cheapest option is to take out a policy in her own name on my car and cancel just before 2 months is up.
    Originally posted by Ant555
    That seems unlikely to be cheap. Even if your daughter has substantial NCD, she won't be able to use it both on her own car and on your car.

    Cancellation costs from insurers can be quite high. You are unlikely to be able to simply cancel a policy after 2 months and only be charged 1/6 of the annual cost.

    if I decide to go down this route then I guess paying monthly is the better option rather than upfront and claim back?
    Originally posted by Ant555
    This approach will not allow you to just cancel the policy and stop paying. There is a strong probability that there would be a significant bill from the insurers at this point.

    Any advice on any pitfalls to avoid are welcome.
    Originally posted by Ant555
    I believe that the approach to cancellation would be that the insurers would work out what they would have charged for a short term policy and refund/bill the difference. This is precisely to avoid people using annual policies plus cancellation as a cheap alternative to a short term policy. The risk of this approach is that you won't know what the total cost will be until you come to cancel.

    Have you discussed with your insurer whether they could add your daughter temporarily for a reasonable cost? The last time I added a temporary driver it was shockingly cheap, something like £1.50, but that was for a single day.
    • Ant555
    • By Ant555 5th Dec 17, 1:10 PM
    • 729 Posts
    • 281 Thanks
    Ant555
    • #4
    • 5th Dec 17, 1:10 PM
    • #4
    • 5th Dec 17, 1:10 PM
    This approach will not allow you to just cancel the policy and stop paying. There is a strong probability that there would be a significant bill from the insurers at this point.

    Have you discussed with your insurer whether they could add your daughter temporarily for a reasonable cost? The last time I added a temporary driver it was shockingly cheap, something like £1.50, but that was for a single day.
    Originally posted by mgfvvc
    She does not have own car and is home from Uni

    Tried to add as a named driver and eSure told me that young driver under 25 cannot be added within the first 6 months of a policy start date - which is not what they said when I took it out in September (I specifically asked the question when I took it out so I am slightly peeved at this!)

    I'll check cancellation costs but an annual policy for her with zero NCD is averaging at £1200/year so at £100/month + cancellation fees this is a reasonable cost. Temporary insurance seems to be averaging around £50/week for someone of her age and limited driving experience.

    It might be cheaper for me to fund her Uber account for the duration.

    Thanks for the advice
    Last edited by Ant555; 05-12-2017 at 3:15 PM.
    • Aretnap
    • By Aretnap 5th Dec 17, 5:18 PM
    • 2,843 Posts
    • 2,339 Thanks
    Aretnap
    • #5
    • 5th Dec 17, 5:18 PM
    • #5
    • 5th Dec 17, 5:18 PM
    and if I decide to go down this route then I guess paying monthly is the better option rather than upfront and claim back?
    Originally posted by Ant555
    It will make no difference - assuming you have the cash to pay up front. With rare exceptions "paying monthly" doesn't mean that you have a rolling monthly contract - it means that you have an annual contract and you take out a loan to enable you to pay the annual premium up front. If you cancel the policy the loan still needs repaying. Some of the repayment will come from the refund (if there is one), but you may still have more to pay to cancel. Generally speaking paying monthly doesn't mean that you can cancel on better terms than paying annually.

    One thing to be aware of is that if she makes a claim on the policy she won't get any refund on cancellation (or if she's paying monthly, the whole year's premium will be due on cancellation), so if you go down this route make sure she drives carefully!
    • forgotmyname
    • By forgotmyname 5th Dec 17, 9:46 PM
    • 26,230 Posts
    • 10,469 Thanks
    forgotmyname
    • #6
    • 5th Dec 17, 9:46 PM
    • #6
    • 5th Dec 17, 9:46 PM
    £1200 was that declaring she is not the owner or registered keeper of the vehicle? sounds cheap.

    Paying monthly is probably not better because your paying the full premium say £1200 + interest for the loan you took to pay the £1200.

    Sometimes the interest rate is around the 30% mark to pay monthly.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • Blibble
    • By Blibble 6th Dec 17, 7:51 AM
    • 253 Posts
    • 113 Thanks
    Blibble
    • #7
    • 6th Dec 17, 7:51 AM
    • #7
    • 6th Dec 17, 7:51 AM
    As above, if you pay monthly you'll still be liable for the charges which would have been made for the interest for the remaining 10 months. You would also be liable for the cancellation charge, if applicable.

    It's a case of whether:

    2 months premium + cancellation charge (+ interest, if monthly) > short term cover for 7 weeks.
    • mgfvvc
    • By mgfvvc 6th Dec 17, 10:51 AM
    • 231 Posts
    • 98 Thanks
    mgfvvc
    • #8
    • 6th Dec 17, 10:51 AM
    • #8
    • 6th Dec 17, 10:51 AM
    (I specifically asked the question when I took it out so I am slightly peeved at this!)
    Originally posted by Ant555
    A formal complaint might persuade them to honour whatever they told you at the start?

    I'm not sure how likely that is, but it might be worth trying?
    • Ant555
    • By Ant555 8th Dec 17, 2:19 PM
    • 729 Posts
    • 281 Thanks
    Ant555
    • #9
    • 8th Dec 17, 2:19 PM
    • #9
    • 8th Dec 17, 2:19 PM
    Thanks to all that replied - to complete this thread incase anyone ever searches on it in the future...

    I decided to keep it simple and purchase 28 days cover from Marmalade (we had learner driver cover with them so they offered a discount)

    My original thoughts about paying monthly/upfront was not to avoid paying what I owed but if I were to cancel then insurance Co would say 'you owe us £x' and I would send it to them rather than me trying to claim money back which might have taken time. However, in my case, the savings for 1 or 2 months insurance were not sufficient to outweigh the potential hassle in the event of a claim.
    • Ant555
    • By Ant555 8th Dec 17, 2:26 PM
    • 729 Posts
    • 281 Thanks
    Ant555
    £1200 was that declaring she is not the owner or registered keeper of the vehicle? sounds cheap.
    .
    Originally posted by forgotmyname
    Yes, all questions answered properly and it was so cheap for this cover that I ran the same comparison with a different email address on a different lap top and it came up the same.
    As my Sept 17 renewal invitation/confirmation of NCB has her listed as a named driver, the Insurance Co in question were prepared to accept this as proof of one years NCB.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,248Posts Today

6,093Users online

Martin's Twitter
  • RT @bearface83: @MartinSLewis check out the @Missguided new 60% off offer. Upping the cost of items almost double to make us think it?s a?

  • RT @efitzpat: Thank you SO SO much @MartinSLewis for your Student Loans refund advice! I just got a grand refunded right before Xmas! Whoop?

  • Have a lovely weekend folks. Don't do anything (fiscally) that I wouldn't do!

  • Follow Martin