Insurance void from inception and demanding money - please help

Puccini777

Hi there,
So here is the short story. I took out motor trader insurance with ONE INSURANCE company. I took out monthly payments. Then after like 3 months, i get a letter that they think that i am actually not trading and that my insurance is void from inception. Meaning I had no cover at all. They didn't even ask for any proofs of trading vehicles or anything, they just did an assumption and voided it and gave it to me as a fact without any ability to do anything about it.
OK, I got insurance elsewhere and happy with it now.
But now the PROBLEM - they started taking money off my card (no permission was ever given, and monthly payments were through direct debit with CLOSE BROTHERS). It means they stored my card details when i took out insurance and paid initial payment. I guess that is illegal. Anyway, I decided not to make huge fuss, so i blocked the card and got another loosing them the ability to take more money off me. And then it started - threatening letters, that I owe them for the whole year, I have to pay it, bla bla bla... I ignored it. Then some kind of COBRA DEBT COLLECTORS started texting me, sending letters with the same story, that i need to pay ONE INSURANCE and so on... this debt collector company looks to be the same ONE INSURANCE as after doing some research, turns out they are in the same building and apparently is only a debt collection department of the same company. But on their letters or emails there is no official company name or any other details for this. Now I received a letter threatening with court.
Can they do this? They void my insurance after 3 months, and demand money for the whole year... That looks more like a fraud to me.
Please help

forgotmyname

Make a formal complaint in a letter not phone or email.

Puccini777

But in general, do they have a right to demand money for the policy which they voided? They are asking for payment for policy, which turns out I never had. SO as far as I am concerned, if they voiding it, they suppose to return the money I already paid, but not demand from me to pay for something they have voided. Or am I wrong?

tykesi

What do the terms and conditions of the policy you took out say?

Aretnap

If an insurer voids a policy because you have provided false information, then generally speaking it is not required to refund your premiums if you deliberately or recklessly provided the false information.

If the false information was provided merely carelessly they should refund the premium.

The fact that they're insisting on payment of the full premium suggests that they're treating this as deliberate/reckless misrepresentation, and to be fair, claiming to be a motor trader when you're not sounds like a difficult thing to do accidentally.

The fact that you're paying monthly probably doesn't make a difference - most "pay monthly" insurance policies are actually annual policies where you borrow money to pay the annual fee - then pay back the loan over 12 months. If the policy gets cancelled, you still owe the remainder of the loan.

You would be better off arguing over the cancellation itself if you can. Are you actually trading - and what evidence can you provide that you are?

A successful complaint about the cancellation would not only solve the refund problem - it would also prevent you from having to declare for the rest of your life that you've had a car insurance policy cancelled, which is likely to cost you much more in the long run than a year's cover.

rudekid48

Have you told your new insurer that your previous policy was voided? If not then you are in for big problems should you need to claim...

dacouch

How did your Insurers discover you were not a trader?

Were you stopped by the police by any chance

Blibble

Has the insurer confirmed any further details as to why the policy was voided - as Aretnap notes, you would still be required to pay the rest of the premium for the period of insurance if there is either a previous claim or if they believe you have deliberately mis-represented any facts at point of inception.

You would need to discuss this point with the insurer directly.

paddyandstumpy

Given you haven't protested that you actually are a trader, I'll presume you aren't. If that's the case, why try and take out a traders policy?

Also, you mention you now have a new policy. Have you declared the previous voidance to the new insurer?

mills705

Are they asking for the full premium or just time on cover?

If you paid for it in full and voided then they can retain the premium so presumably they will do this if you also pay monthly.

If you signed up for monthly payments did you agree to default back to the deposit card if you failed to make monthly payments? Usually car insurance do this due to people cancelling the DD after a couple of months but being able to provide a yearly cert

mattk_180

Paddy, I've seen it before where as it gives comprehensive cover to drive any vehicle, they try and take out a traders policy as it can sometimes be cheaper than a fleet policy (although a lot of fleet insurances would exclude own vehicles anyway). Other times they may be trading but on the sly and not professionally and some people just want to jump in anyone and everyone's car. I don't really get it myself but it does happen more than you'd think.


OP - No, not illegal and not fraud. As per the above, the money is still owed and you should have looked in to this properly rather than just brushing it off and not taking it seriously!


You need to contact them ASAP to sort this out one way or another. To add to your problems your new insurance is likely to be invalid if you've not disclosed your cancellation and could find yourself in the same problem especially if you have another traders policy and actually not a trader.