Can I cancel car insurance after making a claim?

adub1000

I took out a policy with Tesco bank in September and am currently paying monthly for the insurance.
Since taking the policy out I've had an accident and my car was written off (I decided not to claim for my car but the third party claimed against me.)
So currently I don't have use of a car but was told if I cancelled my policy I would have to pay the remaining premium up front so rather than do that I'm still insured on my car I'm not using and paying the monthly premium.
I've read my terms and conditions and there isn't anything in the paperwork regarding cancellations.
If I cancel my direct debit through my bank will I still be liable for the remaining payments?
Any help would be greatly appreciated.

OnanTheBarbarian

Odds are you have to pay the full premium before you can cancel.

Whatever you do, do not cancel the direct debit as then they will cancel the policy and then you will have to declare a cancelled policy for the rest of your life, which will make all future insurance more expensive for you.

fannyadams

technically you are not 'paying monthly' for your car insurance as they have divided up the annual premium and allowed you to pay it in monthly installments.
so YES they will want the remaining premium up front when you leave (plus admin fee if you cancel before the term is up or insure another vehicle with them).
does anyoe know if you would get a refund if you paid upfront, made a claim then cancelled the insurance?

Faith177

If you made a claim and had paid in full you would not get a refund if you then cancelled as they have provided cover for your claim

dunstonh

So currently I don't have use of a car but was told if I cancelled my policy I would have to pay the remaining premium up front so rather than do that I'm still insured on my car I'm not using and paying the monthly premium.

Car insurance is an annual contract where the premium is due in advance as a single payment. if you pay monthly, you are actually taking out a loan (which is why you see reference to credit on them nowadays). You are not actually paying the premium monthly. You are paying the credit back monthly.

If you claim on a policy then the policy has done its job. No refund. Most insurers will allow you to transfer the policy to a new vehicle but some of the budget ones will actually cancel the policy on payout (Tesco has been mentioned on this board previously by some).

Aretnap

dunstonh wrote: »

If you claim on a policy then the policy has done its job. No refund. Most insurers will allow you to transfer the policy to a new vehicle but some of the budget ones will actually cancel the policy on payout (Tesco has been mentioned on this board previously by some).

If any are still cancelling outright then they're being naughty and a complaint should be made - see point 17 here

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html#17

They should allow the policyholder to transfer the balance of the policy to a replacement car, though that does depend on (a) buying a new car within a reasonable timeframe and (b) the new car being ora type that they would normally be willing to insure the policyholder to drive.

gardner1

adub1000 wrote: »

I took out a policy with Tesco bank in September and am currently paying monthly for the insurance.
Since taking the policy out I've had an accident and my car was written off (I decided not to claim for my car but the third party claimed against me.)
So currently I don't have use of a car but was told if I cancelled my policy I would have to pay the remaining premium up front so rather than do that I'm still insured on my car I'm not using and paying the monthly premium.
I've read my terms and conditions and there isn't anything in the paperwork regarding cancellations.
If I cancel my direct debit through my bank will I still be liable for the remaining payments?
Any help would be greatly appreciated.

why didn't you claim for your car

Aretnap

adub1000 wrote: »

(I decided not to claim for my car but the third party claimed against me.).

Why not? If the third party successfully claimed against you then your no claims bonus is already gone (or at least reduced to reflect the claim) so assuming the value of your car was more than your excess you have nothing to lose by claiming, even if you don't get a huge amount.