Can car insurance cancel my insurance after a total loss?

InsideInsurance

The terms of the policy normally allows them to cancel the insurance at their discretion as long as they give you written notice. It is this clause they'll rely on to cancel it if you dont transfer the cover to a new vehicle within the time limit.

Having a suspended policy is an accounting nightmare, insurers dont "earn" the premium the day you buy the policy and pay them but over the time of the policy and often it is isnt a linear earning pattern. So having to pause the earning whilst the policy is suspended makes the calculation harder. Likewise your IBNR (incurred but not reported claims) provisions also gets complicated especially as they are still RTA insurer on the vehicle if it is put back onto the road before the policy is transferred to another vehicle.

For a week or two you can get away with it but if there wasnt a time limit you'd end up with potentially thousands of policies on your book which are all causing problems so its better to cut them off. You earn the last of the premium immediately and just deal with IBNR as per a normal ended policy

vaio

They can't make up conditions on the hoof, your policy is a contract, if it's in there then they can do it, if it's not then they can't.

Read the policy and complain/refer to FOS if they are doing something unfair.

And, whilst as insideinsurance says, there will be a term allowing them to cancel your insurance, if it costs you money then I'd say it is unfair even if it is in the contract

System

If the driver is insured to drive other vehicles then there would still be something to insure even though the driver doesn't have a car?

Faith177

Clifford_Pope wrote: »

If the driver is insured to drive other vehicles then there would still be something to insure even though the driver doesn't have a car?

If there is no vehicle on the policy to cover then cover is not valid any longer unless the policyholder does a change of vehicle

System

You can buy insurance to allow driving other people's cars even though you have none yourself. So owning a car is an insurance company rule, not an absolute legal requirement.

lisyloo

And, whilst as insideinsurance says, there will be a term allowing them to cancel your insurance, if it costs you money then I'd say it is unfair even if it is in the contract

The thought did cross my mind.
Just because comapanies say something in a contract does not make it correct - look at PPI etc.

I know there has to be a first time, but wouldn't this have most likely been challenged before if it was wrong?
Any idea if the Ombudsman have ruled on this before either way?

Hank - have you asked them for more time?
This is probably a standard letter and a simply request may work.
That would be the first thing I'd try.

lisyloo

You can buy insurance to allow driving other people's cars even though you have none yourself.

I've not come across it but it sounds like an entirely different insurance product.
Individual ompanies can offer whatever products they like and choose their own terms as long as they follow the appropriate laws and regulations.

System

It's called a Non-owner insurance policy, or Personal Auto insurance.

http://carinsurance.about.com/od/PolicyFundamentals/a/What-Is-Non-Owners-Insurance.htm

rs65

Clifford_Pope wrote: »

It's called a Non-owner insurance policy, or Personal Auto insurance.

http://carinsurance.about.com/od/PolicyFundamentals/a/What-Is-Non-Owners-Insurance.htm

The word 'auto' suggests that is american.

In the OPs case, the subject matter no longer exists so I guess the policy naturally ceases. Suspending for 14 days is a benefit.

mills705

14 days is the norm to replace your veh with- there not going to keep a policy running with no vehicle on it until renewal are they?!
Im guessing you might have had some time before this letter too to get a new vehicle.