Car insurance - price increase mid term

djmsemcgrath

I took out car insurance after searching for the cheapest premium, and I was happy with what I found. This was back in November, and I paid in full for the year.

Today, I received an email from the insurance company, saying they had reviewed some of the information I gave them, and found a discrepancy. This was around the length of time I had held a licence. I put 6 years and the actual answer should have been 4. This was an oversight on my part, either a mistype, or I was thinking of another question. Simple mistake.

As a result of this, they have amended the premium and are asking me for another £100. This no longer makes them the cheapest (even using the corrected data with other companies), so I enquired about cancelling and was told there was a £59 cancellation fee.

I queried this, saying that the amended premium had surely instigated a new contract (they sent out a new policy schedule), and therefore, the cooling off period still applies? They said no, and are refusing to cancel without a penalty fee.

Does anyone know where I stand with this?

glentoran99

You have to pay, or cancel with a penalty fee, you took it out with the wrong information your fault, your actually lucky they didn't cancel it and you have to declare you had insurance cancelled on every application

djmsemcgrath

I accept I supplied incorrect information, which was a mistake and nothing sinister. I would have expected them to query some information within the cooling off period, to give me an opportunity to correct it. By waiting until after that period, it gives them licence to basically charge me whatever they want, doesn't it? What if they came back to say, it's £1,000 extra - would I be tied into paying it?

ThumbRemote

I suspect you're stuck with it.

You asked for insurance on the basis of information you gave, which they have provided. As that information was wrong they have a good reason not to pay out in the event of a claim - i.e your insurance is invalid.

They have now picked up on the mistake and are giving you two options:
1. Continue with the existing useless insurance policy. You'd essentially be uninsured, and need to take out a brand new policy with someone else to get valid insurance.
2. Pay the difference to upgrade to a valid policy.

I suspect that they don't even have to offer you the chance to put the mistake right, so you should be pleased they have picked up on this and are offering to put it right.

glentoran99

damianjmcgrath wrote: »

I accept I supplied incorrect information, which was a mistake and nothing sinister. I would have expected them to query some information within the cooling off period, to give me an opportunity to correct it. By waiting until after that period, it gives them licence to basically charge me whatever they want, doesn't it? What if they came back to say, it's £1,000 extra - would I be tied into paying it?

The cooling off period is for you not them, and no you wouldn't have to pay you could pay the cancellation fee

djmsemcgrath

It is nice of them, in that sense. But I reckon the difference of £100 is hugely inflated, and much more than another company would charge (by looking at quotes using the correct data, the difference is only a maximum of £30 above the original quotes). It's disappointing that they can literally charge whatever they like in this circumstance without any negotiation or cancellation rights for me.

Gavin83

Adjustment fees are always huge. I wanted to change my address half way through my policy and they wanted £220. Considering the difference on a new year long quote between the addresses was around £50 I found this obscene.

Still you should probably consider yourself lucky. They could have just cancelled your policy which would have cost you thousands over the next few years (at least double the cost for future premiums) or you could have had a claim and they'd have refused to pay.

Given the circumstances your probably best off just paying the extra and make sure in the future your data is spot on.

naedanger

damianjmcgrath wrote: »

I accept I supplied incorrect information, which was a mistake and nothing sinister.

If they had good reason to suspect something sinister (e.g. you had deliberately provided incorrect information for financial gain) they would have voided your policy and refused to return the amount you had already paid. You would then also have to disclose this event to other insurers which they could take into account when underwriting you.

They have not done this so they accept it was just a simple mistake.

I would have expected them to query some information within the cooling off period, to give me an opportunity to correct it.

Did they not send out full details of the information on which they based your premium when they sent you the policy schedule?

By waiting until after that period, it gives them licence to basically charge me whatever they want, doesn't it? What if they came back to say, it's £1,000 extra - would I be tied into paying it?

I suspect they will be charging you the extra premium they would have done had you supplied the correct information to begin with plus possibly a policy alteration fee for the extra work of revising the policy. If you think they are profiteering you could complain, to the Ombudsman if necessary, but you might be taking a risk.

cono1717

naedanger wrote: »

I suspect they will be charging you the extra premium they would have done had you supplied the correct information to begin with plus possibly a policy alteration fee for the extra work of revising the policy. If you think they are profiteering you could complain, to the Ombudsman if necessary, but you might be taking a risk.

Exactly this, the ombudsman could rule its not fair for them to charge you more than what you should of been charged in the first place, however the insurance company could then say "Ok we won't do that, we'll void the policy".

You got off very lightly and £100 is going to be a heck of a lot cheaper than cancelling and getting a new policy.

Ectophile

You've basically got 3 choices:-

1. Pay the £100.
2. Pay the £65 to cancel and try to get insurance elsewhere.
3. Argue with them.

If you choose 3, there's a real risk that they will just cancel your policy for giving them false information. You will then have to declare this to every other insurer that you try to get insurance from. I really don't recommend option 3.

hollydays

Is it possible that this could affect future premiums with other companies?