Changes to car insurance policy - can they do this?

JuniorSherlock

10 months ago my husband took out car insurance through the AA for our rather battered Peugeot. Last week it unfortunately expired and we had no choice but to scrap it.

We bought a second hand Peugeot - same make but 5 years newer at 10 years old. Hubby phones up AA to transfer the insurance but is told they cannot.

They say they will not transfer insurance to a car 10 years or older (despite our original car being 15 years old) when the policy is less than 12 months old.

My husband argued that this is not in the terms and conditions of the policy and plenty of people transfer their insurance policy when they buy new cars. He was told that when he first took out the policy it would not have been an issue but that the policy had changed since then and they have no obligation to tell him of this change.

The woman on the phone said that insurance policies change all the time and they don't tell their customers about every little change. Of course he argued that this is not a little change but quite a big one however she was adamant that this is right.

Eventually they agreed to refund the 2 months insurance we'd lose but we still lost a year of no claims and had the hassle of searching for a new provider.

I just wanted to know if this was normal practice?

dunstonh

My husband argued that this is not in the terms and conditions of the policy and plenty of people transfer their insurance policy when they buy new cars.

Many people do transfer their insurance but it is always subject to acceptance. I have had a case where the existing insurer wouldn't accept the new car as it wasnt on their list.

He was told that when he first took out the policy it would not have been an issue but that the policy had changed since then and they have no obligation to tell him of this change.

It is not the sort of change you would expect to be told about as its not a contractual change. They have just made a change to what they accept in future. Its a very minor change

I just wanted to know if this was normal practice?

It isnt common as most insurers will cover most vehicles. It can happen though on brand new models and very old models or where perhaps the risks have increased above their tolerance.

Non contractual changes happen to policies all the time. They have to honour the contract but they dont have to offer terms when you want to break the contract.

JuniorSherlock

Thanks for the reply. We just found it puzzling as they had no qualms about insuring our 14 year old Peugeot 10 months ago but will not now transfer it to the very same brand of car that is only 10 years old.

We've transferred in the past and it's never been a problem. If we had known that this change was likely to happen, we would not have gone with the AA as we knew it was more than likely that we would have to get rid of our old car in the not too distant future.

The one we've just gone with, Esure, say they don't have any such stipulations about transfers so it got us thinking about the logistics of this and whether we ought to complain or not.

I guess, based on your reply, we'd have no grounds to complain.

Thanks very much for replying so quickly too

dunstonh

We just found it puzzling as they had no qualms about insuring our 14 year old Peugeot 10 months ago but will not now transfer it to the very same brand of car that is only 10 years old.

That was because they would cover it from the start. Think of it almost like having a version number. Your policy was version 1. Anyone on version 1 stays on it until a change happens. In the meantime they may come out with version 2, 3 or 4 over the years. New business and changes go on the requirements of the latest version.

The one we've just gone with, Esure, say they don't have any such stipulations about transfers so it got us thinking about the logistics of this and whether we ought to complain or not.

What have you got to complain about? No company is obliged to accept you. You got your two months premium refunded in full. So, you are no worse off. Indeed, I would say that is quite a good result. Many would not have refunded as much, or even anything at that point.

Do note, that esure are well known for cherry picking. If you get speeding points or change to another vehicle which shoves you up the scale then expect the premium to go up more than you may think. If you happen to fit their target market though they can be competitively priced. They have a reputation for being hard on claims.

InsideInsurance

You also have to remember that the AA is a broker and not an insurer. So when they sell you a policy it is placed with one of their panel.

It can be that in addition to mainstream insurers that they have a number of more niche providers on their books who are able to pick up customers with custom vehicles, very old vehicles, lots of points on their license etc. This can mean you get a good price for your new business quote but if mid term your situation changes such as you no longer fit that niche that either the premiums sky rocket or that they simply cannot do a Mid Term Adjustment and instead have to offer the cancel and rebuy option because your actual insurance is held with the insurer not the broker.

Esure as an insurer have an easier time talking about their processes etc because there is only one and they set it. AA has a series of them from each of their underwriters and their own over the top of those.

rs65

JuniorSherlock wrote: »

I guess, based on your reply, we'd have no grounds to complain.

Probably not. When they say its their policy not to accept cars over 10 years old they are talking about their underwriting criteria rather than the policy wording.

You will never see all their criteria in the policy wording or in their terms and conditions. Plus, as you have discovered, the criteria can change.

Refund of the 2 months is an ok result.

JuniorSherlock

Thanks for the replies. I realise we were lucky to get the 2 months refund which was only offered when we insisted. They weren't going to give us a refund at all to start with, they just said we'd have to cancel the insurance. Also there is the 10 months no claims bonus that we've lost, not to mention a full day spent trying to contact them on the phone, going through the options time and time again, waiting for someone to pick up our call, waiting for callbacks that never happened, having to repeat our story to every call operator we spoke to etc. So customer services ain't great.

But we accept now that they've done nothing out of contract. We had just never heard of this. We've no points on either licence, have a good no claims record and are both over 40. The car we've just bought is a newer version than the one scrapped so you'd have thought they would want to keep our custom, but it seems not.

Not a great way to treat customers but hey ho, that's life. Thanks again for replies.

vax2002

You are probably best rid of them if thats how the treat customers.