Refused vehicle change - mid term (PO)

ILW

I would suspect there is some confusion here. I would call them again and ask for them to put this in writing.

Stooby2

There are some policies about like this bought I thought they were limited to classics. I had a similar policy, but it was clearly stated to me when I took it out and I'm surprised the Post Office didn't make this clear.

Joe_Horner

Looking round the available policy booklets from BISL (most of the banks use them), the insurer itself doesn't seem to have a problem with changing cars - they simply say that you must inform them (and presumably pay extortionate fees for a new bit of paper).

Even if it is in the policy it's almost certainly an unfair term because it puts them at a HUGE financial advantage.

Another way to approach it might be to press that that they are now refusing to continue cover, so the policy should be cancelled under the "if we cancel..." section rather than the "if you cancel..." one. In that case you would be entitled to a pro-rata refund of your premium (basically half your premium back) rather than a refund according to their short-rates table.

vaio

The FOS view is that refunds from mid term cancellation should be broadly pro-rata for time on cover remaining irrespective of who cancels.

If the insurer cancels then there might be an argument about the inevitable admin fee but the time on cover costs should be the same

Joe_Horner

vaio wrote: »

The FOS view is that refunds from mid term cancellation should be broadly pro-rata for time on cover remaining irrespective of who cancels.

If the insurer cancels then there might be an argument about the inevitable admin fee but the time on cover costs should be the same

Yes, they should be.

But BISL, like most insurers, place a term in the contract that any refund on cancellation by you will be calculated using short-term rates for the time on cover. Their justification is that short-term is statistically a higher risk and calculating like that prevents people who know they only want, say, a month of cover taking a year policy then cancelling.

It's almost certainly an unenforceable term, and on the few occasions I've seen it queried they back down quickly as a "goodwill" measure. But they rely on the fact that a large number of people will simply accept it if the issue arises.

Ironically (and I'm sure the insurers are aware of this) the people least likely to challenge it are the ones who find themselves in that situation genuinely unexpectedly. People out to leverage the system will be well aware that it can be challenged.

dacouch

Joe_Horner wrote: »

Yes, they should be.

But BISL, like most insurers, place a term in the contract that any refund on cancellation by you will be calculated using short-term rates for the time on cover. Their justification is that short-term is statistically a higher risk and calculating like that prevents people who know they only want, say, a month of cover taking a year policy then cancelling.

It's almost certainly an unenforceable term, and on the few occasions I've seen it queried they back down quickly as a "goodwill" measure. But they rely on the fact that a large number of people will simply accept it if the issue arises.

Ironically (and I'm sure the insurers are aware of this) the people least likely to challenge it are the ones who find themselves in that situation genuinely unexpectedly. People out to leverage the system will be well aware that it can be challenged.

BISL are a broker and not a great one at that.

If the OP has had an accident it might be why there's no refund.

I read about 18 months ago a post from a supposed BISL employee (Not sure if they worked on the P.O Scheme)who said a work around was to allow BISL to requote you with another one of their Insurers they would then allow a normal refund (Assuming there was no claim) you then cancel the new policy under the 14 day cooling off period but would get their 14 day cooling off period admin fee.

Paperbird

The only time I've had that was when I was thinking of changing the car so phoned to get a quote and they said they couldn't give a quote as they wouldn't cover my then learner driver OH in that car. ( but did say once the test was passed I could change to that car with no increase in premium )

Joe_Horner

dacouch wrote: »

BISL are a broker and not a great one at that.

If the OP has had an accident it might be why there's no refund.

I read about 18 months ago a post from a supposed BISL employee (Not sure if they worked on the P.O Scheme)who said a work around was to allow BISL to requote you with another one of their Insurers they would then allow a normal refund (Assuming there was no claim) you then cancel the new policy under the 14 day cooling off period but would get their 14 day cooling off period admin fee.

Fair comment, but all the available specimen policies from them include a conversion to short-term rates on cancellation or calculation according to a table which is based on the short term rates so comes to the same thing.

In some cases they waive this after the first year of cover, presumably as a way to reinforce their argument about avoiding premeditated cancellation, but it's still an inherently unfair term .

As for your re-quote suggestion, the problem the OP has is that they're being told they're not allowed to change cars at all, so re-quoting isn't an option.

That refusal to allow a change of vehicle is also likely an unfair term because there are any number of unforeseable reasons, completely outside the customer's control, which might lead to a need to change their car. By refusing to allow that they're requiring the customer to either continue paying for a non-existant risk (ie: pay for a service no longer being provided) or accept their unfair cancellation terms which are heavily biased in the company's favour.

dacouch

Joe_Horner wrote: »

Fair comment, but all the available specimen policies from them include a conversion to short-term rates on cancellation or calculation according to a table which is based on the short term rates so comes to the same thing.

In some cases they waive this after the first year of cover, presumably as a way to reinforce their argument about avoiding premeditated cancellation, but it's still an inherently unfair term .

As for your re-quote suggestion, the problem the OP has is that they're being told they're not allowed to change cars at all, so re-quoting isn't an option.

That refusal to allow a change of vehicle is also likely an unfair term because there are any number of unforeseable reasons, completely outside the customer's control, which might lead to a need to change their car. By refusing to allow that they're requiring the customer to either continue paying for a non-existant risk (ie: pay for a service no longer being provided) or accept their unfair cancellation terms which are heavily biased in the company's favour.

You must have missed the bit where the OP said BISL have offered another quote presumably with a different Insurer.

Without knowing whether the OP has had a claim you don't know whether the no refund after cancellation is an unfair contract.

The Ombudsman does not feel Short Period Rates are unfair in all cases, if the Insurer can show the costs reasons why they apply short period rates then the Ombudsman agrees with them.