Insurance Void Vs Cancellation

l0u1se

Hi guys, if I can give you a situation can you please give me your thoughts?

Insurance company cancelled policy because of a non disclosure (length of time license held), the non disclosure was not deliberate. Insurer is stating that the policy is cancelled, rather than voided.

My understanding is that if an insurer will not accept the risk due to a material fact (they will not accept drivers that have been driving under 2 years), is that the policy should be voided rather than cancelled, and a refund of premiums should be issued?

Can somebody please clarify?

Many thanks

forgotmyname

They cancelled it because you failed to disclose material facts.

l0u1se

I understand that they cancelled it, but surely if they have cancelled it due to a material fact then it should be voided, giving a refund of the premiums?

They are trying to state that the policy has been cancelled rather than voided, maybe I'm being thick but if it has been cancelled due to a non disclosure of a material fact, with a new risk that they are no longer willing to insure, and never would have, it should have been voided?

InsideInsurance

Its their decision if they want to cancel the policy at the point of discovering/ deciding on the issue or cancel the policy back to inception/ void the policy.

From an MID reporting perspective it makes more sense for them to cancel it at the point of identifying the issue otherwise they will automatically miss the 7 day reporting window they have.

Similarly as you had the certificate of insurance they would still have RTA liability issues irrespective of the point of cancellation.

Cyberman60

If insurer refuses to reimburse you and you paid by credit card or debit card try contacting the card company and claiming under section 75 Consumer Credit Act 1974.

Quentin

Cyberman60 wrote: »

If insurer refuses to reimburse you and you paid by credit card or debit card try contacting the card company and claiming under section 75 Consumer Credit Act 1974.

The insurer will have used the agreed contract terms to cancel the policy.

Thus a s75 claim is a waste of time (and if a debit card is used then you can never make use of s75 as there is no credit involved)

l0u1se

Thanks for all of your responses, it is not my policy, and I don't have much experience with car insurance issues.

Basically driver has been driving for 1 year 11 months, policy was purchased through moneysupermarket or similar, which asked have you been driving for 1 year/2 years etc

They chose 2 years which obviously isn't true but thought to select 2 years as it was more applicable than one year (in their head at the time)

dacouch

l0u1se wrote: »

Thanks for all of your responses, it is not my policy, and I don't have much experience with car insurance issues.

Basically driver has been driving for 1 year 11 months, policy was purchased through moneysupermarket or similar, which asked have you been driving for 1 year/2 years etc

They chose 2 years which obviously isn't true but thought to select 2 years as it was more applicable than one year (in their head at the time)

How was it discovered eg was it a claim?

How long into the policy was it before they cancelled?

dwsjarcmcd

I would suggest that the better way to handle the 1 year 11 months versus 2 years issue is to ask the Insurer to advise how much extra they would charge for the licence only being held for 1 year 11 months and charge your friend the additional premium to cover any increased risk (if there is any)

Quentin

dwsjarcmcd wrote: »

I would suggest that the better way to handle the 1 year 11 months versus 2 years issue is to ask the Insurer to advise how much extra they would charge for the licence only being held for 1 year 11 months and charge your friend the additional premium to cover any increased risk (if there is any)

Things are usually not so simple.


eg Ignoring the false application, what if the insurer is one who doesn't take on anyone with less than 2 years experience?

smifffy1989

I would speak to them and explain the situation see what they say.

The Consumer Insurance (Disclosure and Representations) Act 2012 says that it is the consumers duty to "take reasonable care not to make a misrepresentation" - replacing the previous duty to disclose all necessary information.

As a result you could argue if you were only given the options 1 year or 2 years then you picked the one most appropriate to your situation.

The only sticking point to this is that you normally are taken to the insurers website after visiting the aggregator (eg moneysupermarket) to confirm all details are correct and at that point there may have been an option to adjust driving experience to 1 year 11 months.