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Provisional to Full UK insurance premium?

hi, i currently hold a provisional driving licence and have my own car. i have been checking with my insurance provider for a quote for when i pass my test and i cant work out the premium. i know the price rises quite a lot when you first pass. i currently pay £68 per month. when i put my details in with a full licence however it says 'additional premium £244', surely this wont be my new monthly payment? my payments have been spread out over 9 months for the year, since september last year, meaning a further 4 monthly payments are due. could this be the additional cost to be spread out over the next 4 months? ie- my usual £68 plus £244 divided over the 4 months? please help, i may sound thick but ive never had car insurance before. :o
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  • Posts: 3,367 Forumite
    misssmcc wrote: »
    hi, i currently hold a provisional driving licence and have my own car. i have been checking with my insurance provider for a quote for when i pass my test and i cant work out the premium. i know the price rises quite a lot when you first pass. i currently pay £68 per month. when i put my details in with a full licence however it says 'additional premium £244', surely this wont be my new monthly payment? my payments have been spread out over 9 months for the year, since september last year, meaning a further 4 monthly payments are due. could this be the additional cost to be spread out over the next 4 months? ie- my usual £68 plus £244 divided over the 4 months? please help, i may sound thick but ive never had car insurance before. :o

    It should be the additional premium for the remainder of the policy.
    Science adjusts its views based on what's observed.
    Faith is the denial of observation, so that belief can be preserved.
    :A Tim Minchin :A
  • Posts: 7,512 Forumite
    Part of the Furniture
    £244 sounds like the extra you will have to pay once you pass your test.
    Be Alert..........Britain needs lerts.
  • paddedjohn wrote: »
    £244 sounds like the extra you will have to pay once you pass your test.

    I do believe you are correct as my daughters car insurance increased as soon as she passed her test.
  • Posts: 14,680 Forumite
    It could mean anything. Phone them and ask for a definitive answer.
  • Posts: 4,895 Forumite
    Ninth Anniversary Combo Breaker
    Also run some new quotes through the comparison sites. When my stepdaughter passed her test, about 6 weeks after renewing her insurance, her annual premium jumped from around £350 on a provisional to over £800 on her new, full, licence. Getting new quotes brought it back down to £375.

    Convincing her existing insurer to cancel the policy without imposing absurd "short term" penalties was a little entertaining but entirely possible because the penalties probably (and they're unlikely to want to test this in court) amount to unfair contract terms in a case like this where the whole basis for the contract has effectively changed outside your control.

    You have absolutely no way of guaranteeing that you'll gain your full licence any time near your renewal date and an insurer offering provisional cover should be aware of that. When you do pass, the premium will rise because the risk increases, but they won't - in fact, probably can't - tell you the amount of the rise when you take out the policy.

    This means that you have an absolute right to cancel, without penalty, when notified of the increase and any contract terms interfering with that right (such as "converting to short-term rates" or making a cancellation charge) are unfair ;)
  • Erm, I could go into why the above post is so very incorrect but I'll save that opportunity.

    I will however summarise: The risk has increased, therefore the cost of the policy will also increase. Are you saying you'd expect the premium to stay the same if you chopped in your Nissan Note for a Bugatti Veyron? It's the same thing, an element of the insured party has changed, so the premium will reflect that. You have as much of a part in deciding to change car, as you do changing the status of your license.

    As for it being outside of your control, no it's really not. I know in this day and age everyone is all for making out to be someone else's fault, but it's not the insurer's fault you now have a full license and so it's perfectly acceptable for them to charge a higher premium. You made the choice to do the full test, not them.

    I'm thinking of upgrading to a car with a V8 engine later this year, does that mean because my current insurer can't tell me the additional premium when I take out the policy, I can cancel without penalty? Of course it doesn't.

    Your insurers probably just agreed to it to get you off the phone.
  • Posts: 4,025 Forumite
    mikey72 wrote: »
    It could mean anything. Phone them and ask for a definitive answer.

    +1.

    We could tell you anything and be wrong. Your only way of knowing is to do as mikey says and ring them.
  • When your pass your test your premiums will go up because you'll no longer have to have a experienced driver with you, so the less experience = higher premium
  • Posts: 4,895 Forumite
    Ninth Anniversary Combo Breaker
    edited 21 February 2012 at 7:18PM
    Erm, I could go into why the above post is so very incorrect but I'll save that opportunity.

    I will however summarise: The risk has increased, therefore the cost of the policy will also increase. Are you saying you'd expect the premium to stay the same if you chopped in your Nissan Note for a Bugatti Veyron? It's the same thing, an element of the insured party has changed, so the premium will reflect that. You have as much of a part in deciding to change car, as you do changing the status of your license.

    As for it being outside of your control, no it's really not. I know in this day and age everyone is all for making out to be someone else's fault, but it's not the insurer's fault you now have a full license and so it's perfectly acceptable for them to charge a higher premium. You made the choice to do the full test, not them.

    I'm thinking of upgrading to a car with a V8 engine later this year, does that mean because my current insurer can't tell me the additional premium when I take out the policy, I can cancel without penalty? Of course it doesn't.

    Your insurers probably just agreed to it to get you off the phone.

    I guess you didn't read this paragraph before jumping on the "post" button?
    Joe_Horner wrote: »
    When you do pass, the premium will rise because the risk increases, but they won't - in fact, probably can't - tell you the amount of the rise when you take out the policy.

    There's no problem with them increasing the premium.

    Where there is a problem is with them increasing the premium, by an amount that they can't specify at the start of the contract, without allowing you to cancel without penalty at that point.

    If there's a change in the contract price after inception you MUST have the opportunity to cancel, without penalty, at that point. The only exception to that is if there's an individually negotiated (ie: not a standard term that they use in all their contracts) term in the contract that removes that right.

    Things change, they don't have to continue cover on an increased risk at the same price but, by the same token, you don't have to accept their re-evaluation of the risk.

    Incidentally, there's also a bit of a grey area around the whole "charging at short-term rates" for policies canceled early. The insurers justify short-term rates as intended to cover the increased risk inherent in short term policies. Assuming you haven't claimed at the time you cancel, the risk is already established as exactly zero for the (shortened) life of the policy.

    Adding a cancellation charge in this case to cover admin, reduced profit etc is perfectly fair business practice but also reassessing the perceived risk to a higher level when it's already been demonstrated to be non-existent probably isn't.



    eta: No, they didn't do it to "get me off the phone". It was done by letter and took exactly ONE letter politely pointing out the above for them to cancel all the additional charges AND refund the part-month of premium already paid by installment as "goodwill in this case".

    That suggests that either they were the nicest insurance company ever to grace the earth, or they really didn't want to get into discussing the legality of their cancellation terms - you decide :)
  • Posts: 14,680 Forumite
    http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

    No grey area on short term rates I'm pleased to say.
    They can try it on, but they know it's not allowed.

    Roughly a pro rata premium, plus a cancellation fee of up to £50 is considered fair, as per the link to the FOS ruling above.
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