Recently paid 1yr Insurance - But Failed MOT 2 months later

Ant555

I can;t remember the exact wording but when looking for car insurance is there a bit on the standard forms that says something along the lines of 'have you ever had an insurance policy cancelled' - seems like something that could bump up a future premium if you say 'yes'

However, I wonder if it refers to situations where the insurance Co have cancelled insurance not you requesting it.

robbies_gal

i dont thik they refer to u cancelling it personally

rudekid48

Iceweasel wrote: »

You have misunderstood this I think.

If the OP cancels now, he will have been deemed to have had a short term 2 month policy, not an annual policy.

The OP paid for a full 12 months.

He is cancelling after 2 months - he will NOT get back 10/12ths of the annual premium minus charges.

He will get back the difference between a 12 months policy and a short term 2 month policy, minus charges.

There may not be much left to refund.

As I said in an earlier post, if you could get back 10/12ths of an annual policy then no-one would bother taking out short term insurance, would they.

Rolandtheroadie's example is exactly how it works.

This is not correct. The OP will be deemed to have had a 12 month policy which has been cancelled after 2 months. Some insurers will charge short period rates but most these days calculate the Time On Risk charge on a pro-rata basis and then add on any charges and non-refundable add-ons, the balance is then issued as a refund (assuming the policy was paid in full). All of this will be in the policy booklet and/or T&C's provided when the policy was purchased.


The stuff about changing a 12 month policy into a 2 month policy is nonsense, sorry.

Iceweasel

rudekid48 wrote: »

The stuff about changing a 12 month policy into a 2 month policy is nonsense, sorry.

It's not nonsense as I never said anything about changing into a 2 month policy.

I said it would be deemed to be a 2 month policy as it was terminated after 2 months - and recalculated before subracting any charges and then giving a refund of what, if anything, remains - big difference.

That was precisely what they did with my policy a couple of years ago - I know that is what happened as I sat in the insurers office and watched and listened as they recalculated the cost of the 2 months.

I notice you say 'some insurers will charge short term rates' which is exactly what I described.

And then you say 'most these days will calculate Time on Risk'.

So we are both right and both wrong, if you like, as not all insurers react to a cancelled policy the same way.

Again I must ask the question -What is the point of short term insurance if it's easier and cheaper to just take out a 12 month policy and cancel it as and when necessary?

agrinnall

Iceweasel wrote: »

Cancelling and then starting a new policy may well give a different result than leaving the company for a competitor.

In fact I'd already started the new policy and had them both running together as I had an overlap where I was living in a rental property with my belongings but had also taken ownership of the property I was buying so needed (at least) buildings cover, so that may have coloured their response to the cancellation, which they knew was coming.

Apart from the silly "nonsense" comment rudekid's post does seem to reflect what my motor insurance policy wording says, and echoes the comments of the FOS in the link I posted previously. It makes me wonder if there has been a change in the way things work in the last couple of years, and that you are in fact right that short term insurance is now an even more niche product, perhaps more for those who don't want to set up, and pay for, an annual policy before getting a refund at cancellation time.

rudekid48

Iceweasel wrote: »

It's not nonsense as I never said anything about changing into a 2 month policy.

I said it would be deemed to be a 2 month policy as it was terminated after 2 months - and recalculated before subracting any charges and then giving a refund of what, if anything, remains - big difference.

That was precisely what they did with my policy a couple of years ago - I know that is what happened as I sat in the insurers office and watched and listened as they recalculated the cost of the 2 months.

I notice you say 'some insurers will charge short term rates' which is exactly what I described.

And then you say 'most these days will calculate Time on Risk'.

So we are both right and both wrong, if you like, as not all insurers react to a cancelled policy the same way.

Again I must ask the question -What is the point of short term insurance if it's easier and cheaper to just take out a 12 month policy and cancel it as and when necessary?

The point is that no annual policy is "deemed to be a 2 month policy" if it is cancelled. The (very) few insurers that would offer a 2 month policy would calculate the premium for that period differently than those that apply "short term rates" to an annual policy that is cancelled. Short term rates tend to be a fixed % of the annual premium based on time e.g. 30% of annual premium after 1 month and so on. A short term policy would be priced based on the risk profile for the period of insurance and not as a % of an equivalent annual policy.

Iceweasel

rudekid48 wrote: »

The point is that no annual policy is "deemed to be a 2 month policy" if it is cancelled. The (very) few insurers that would offer a 2 month policy would calculate the premium for that period differently than those that apply "short term rates" to an annual policy that is cancelled. Short term rates tend to be a fixed % of the annual premium based on time e.g. 30% of annual premium after 1 month and so on. A short term policy would be priced based on the risk profile for the period of insurance and not as a % of an equivalent annual policy.

Ah, now that you've explained it a bit more I can see your point.

The 30% of an annual premium after 1 month sounds about right.