Should I pay after cancelling Car Insurance

sarahmtly

Hi all. I'm new to this forum and I have a bit of a complicated problem so please bear with me.

My husband did have 2 cars (1 of which I used but both in his name). He wanted to insure both cars with the same company to make things easy. So we shopped around for quotes and the cheapest by far was RAC. We proceeded to insure both our cars and was very happy because his 9 years no claims bonus meant it was very afforrdable.

A couple of weeks later they asked us to supply proof of no claims which we did but they said if we have 2 cars insured we must have 2 sets of no claims bonus. I had never heard of this I always thought it was the person who collected the no claims bonus not the car.

Anyway because of this the price of the insurance shot up. So we got rid of one car as we couldn't afford to keep it and just kept the other. However RAC continued to take the higher monthly amount of money from our bank via direct debit even though we had provided the proof of no claims. This happened repeatedly for about 4 months and each time my husband made a phone call to them and each time they apologised. They even once refunded us some of the extra money we paid.

Anyway 5 months later (which was last month) we decided to get a new car. Again the RAC took the wrong amount of money from our bank so being absolutly fed up with their poor service we decided to go back to Tesco Insurance and cancel our direct debits and policy with RAC.

At that point we was about £20 away from paying a whole years car insurance with RAC because of their stupidity of keep taking so much money from us each month. We sent the policy back to them as requested and lo and behold next thing I know they send us a letter saying we have to pay them £230 because we cancelled the policy early !!! :mad:

So are they legally able to do this and should we just pay it or risk them taking us to court ?

I hope someone can help us, and thanks for reading my problem

Quote

Insurance is a contract and you've broken the contract so, ultimately, I imagine that what they've told you is correct, although this all sounds like such a balls up, I don't really have a clue.

In truth it's neither the person nor the vehicle which earns no claims discount, but rather the policy. The policy accrues NCD in the name of the PH. A claim on the policy affects the NCD. A change of vehicle on the policy doesn't affect the NCD. In order to have two lots of maximum NCD you would, in theory, need to have had two policies running for 5+ years.

I'm sure someone will correct me if I'm wrong, but the RAC only administer the insurance, they are not the actual insurer. There are plenty of companies who could have done you a better deal than a tuppenny-ha'penny outfit like the RAC - and keeping both vehicles in "the same place" doesn't always make things easier any more than thinking the cheapest deal will automatically be the best. If you consider the two-vehicle option again I suggest you contact a decent local broker and read the terms and conditions, and always remember that the cheapest option may end up costing you money.

bouncydog1

Your post is quite complex but from what I understand I think the position is as follows:-

You got a quote from the RAC for two cars, understanding that the maximum no claims bonus would apply to both. The RAC requested evidence of bonus for both vehicles and discovered that there was only one lot of no claims. This meant that the second vehicle would be rated at a higher premium.

As you did not want to pay the premium you sold the car. You would have owed the RAC the total premium net of no claims bonus for car 1. In addition you would have owed them short period rates for the second car at the higher rate of premium, because it did not have any bonus.

You then added another car to the policy which they would have underwritten on the same basis as the original car 2 - e.g. with no, no claims bonus. You then cancelled the policy.

As you have cancelled the policy they are entitled to charge you short period rates, which do work out more expensive than pro rata e.g. if you insure a car for say 8 months, you will likely find that the premium is the same as insuring for one year.

You have now insured both vehicles with Tesco - have Tesco mirrored the no claims bonus on car 2 and have they confirmed this in writing, otherwise you may find yourself in the same position as you were with the RAC - one car on full bonus and the other with none.

With regards to the RAC, I would suggest that you get out your bank statements and set out a schedule of what you have paid them, along with the schedule of events. e.g. policy on car 1 incepted at premium of x. YY amounts paid on following dates. Car 2 added - z amounts paid on following dates. Car 2 deleted - refunds given. Car 3 added - payments made etc.

Then send this to the RAC by recorded delivery in writing asking them for a review of the case. I would also add that you might also want to pay up the £230 whilst the enquiry is pending, in case they take legal action to recover the money which they are entitled to do.

You will need to see everything clearly set out in writing, but the underlying cause of the problem is the assumption that you had the bonus and it applied to all cars. Some insurers will mirror bonuses but not all and it appears that the RAC are not one that does. Good luck!

sarahmtly

Great news to follow up on this. After a lengthy investigation by RAC we finally received a letter saying they are sorry for the mistakes they have made and agreed to waiver the cancellation fee and also refund us £115. What a nice Christmas Present
Thanks for advice