car insurance - was this policy "cancelled"?

sunflower_2

Hello

My friend, yes really , fell behind with her car insurance instalments, missing 2 consecutive months.

Needless to say, the company sent her a letter adivising the policy would be cancelled for non payment with effect from midnight **/**/2013.

She has asked me to help her find another policy and I am confused by one of the questions.

They ask "have you ever had insurance cancelled or declined?"

My friend is convinced this is referring to cancellations where a crime is committed, has chosen to answer as "no" and has purchased a new policy on this basis.

I am now really concerned that should she need to claim on this policy, they may use this as a get out clause not to pay out?

Can anyone please put my mind at rest? Does cancellation for non payment class as an insurance being cancelled?
(as I type this it seems so obvious to me, but she is adamant).

Thank you in advance for any help

InsideInsurance

Yes, cancellation for non-payment does count as a cancellation

Quentin

Her new policy is a waste of her money, as she didn't disclose this.

ie. If she needs to use it to make a claim, they won't pay out. Worse, if a third party makes a claim against her which the insurers agree to pay, then they will pursue her to reimburse them all their outlay.

forgotmyname

Sometimes they take your word for it, But when a claim arises they usually check details closer.

They will find the previous cancelled policy and then say she is not insured.

The bill could be for thousands and thousands for even a small claim.

My sister had someone bump the back of her and although it was not major the payout for the whole family in the car was about £13,000 - £15,000 + the cost of fixing the car.

Quentin

forgotmyname wrote: »

Sometimes they take your word for it, But when a claim arises they usually check details closer.

They will find the previous cancelled policy and then say she is not insured.

The bill could be for thousands and thousands for even a small claim......

When a claim arises they always check details closely!

And a third party claim could be millions if disabling injury is involved.

Just not worth risking it.

sunflower_2

thanks for all the replies - you have all confirmed what i thought.

i know it is now my moral duty to inform her - but think it is going to go down like a lead balloon.

would it change anything if she rang the company and told them? is it likely they would just accept this late disclosure and continue to insure her?

i think i will put it along the lines of "whilst you have an insurance certificate you are not insured for any claims - also why would you pay extra money per month to be 'fully comp' when they wont pay out anyway".

wish me luck - thanks again.

Quentin

It might be cheaper (and less hassle for her) to simply cancel the current policy and start a new one with an insurer who knows from the outset she has a previous cancellation on her record.

The danger in coming clean to the current insurer is they take the view it was a deliberate non disclosure (which it was), and cancel this policy making 2 on her record.

rs65

sunflower wrote: »

would it change anything if she rang the company and told them? is it likely they would just accept this late disclosure and continue to insure her?

You could phone her company pretending to be a prospective customer and say you are doing a quote on line and reached the question about cancelled policies. Then ask, do you consider a policy that has been cancelled due to payment defaults to be 'have you had a policy cancelled'.

InsideInsurance

Quentin wrote: »

The danger in coming clean to the current insurer is they take the view it was a deliberate non disclosure (which it was), and cancel this policy making 2 on her record.

A deliberate non-disclosure cancellation is also going to be much more unacceptable to others in the future where as you MAY be able to sweet talk someone into accepting a cancelled for non-payment

Of cause different insurers go through different levels of checks at different points and it could well be that she can "get away" without mentioning it but as others have said, you really dont want to find your policy being cancelled just as you have a fault accident and people are suing you for 6 figure sums

Parking_Trouble

If she is hard up how will she pay for the new policy?

Better to have scraped together the money to catch on the repayments. It is going to cost more in the long run with a cancellation hanging over her.

Buzby

Might be better to 'clarify' what happened n WRITING - a DD glitch or whatever, adding that at no time was insurance cancelled due to any claim aim or restriction.

If there is no adverse response, she's made a full disclosure. If they cancel - she's really no worse off.