Undercharge for car insurance

Elliot_Shorrick

My car insurance company have written to me to say that they undercharged us last year and will increase next years to make up the loss - can they do this?

agrinnall

It depends on the reason for the undercharge, if you can tell us what they've told you we can offer opinions whether it's reasonable/legal or not.

Elliot_Shorrick

were notified by letter that they charged a lower premium, their mistake, by around £90 and we shouldn't worry and don't need to do anything as they may alter next years insurance to cover the shortfall.
My wife phone them for clarification and they said that they will be increasing whatever next years cover is to include the shortfall.
This is nearly 5 months into thew year - how can they do this?

Aretnap

What was their mistake? Did they offer you the "correct" premium initially, and then take the wrong amount from your bank account by direct debit or card payment? Or did they offer you the premium they actually paid, and are now saying that it was a glitch in their software and they would have preferrred to charge a different premium? Or was the information they had on you incorrect for whatever reason - for example because they thought your car was kept in a garage when you'd actually told them it was on street?

Elliot_Shorrick

they gave a new price on the renewal (an increase on the year before, of course), we called up to try and bring them down in price which we failed to do and we went with it.
No reason given for the incorrect quote apart from saying it was by mistake

lisyloo

I'm not sure what you issue is.
They have undercharged you and this is to your benefit.
You can get your insurnce next year with whoever you like.
Insurers can put up their price for any reason (nice office, champagne for the shareholders) and they have no obligation to you on future prices.

I'm not clear on your complaint as you have only beneffited.
Lots or prices go up all the time without you being consulted.

Elliot_Shorrick

but they are now telling us that they'll increase next years to include the shortfall.
If we leave them are they going to try and get the shortfall another way?

Quentin

Cross that bridge when you come to it!

lisyloo

but they are now telling us that they'll increase next years to include the shortfall.

And as I said, lots of other comapnies will put up their prices for all sorts of reasons they won't tell you about. That is their business decision.

If we leave them are they going to try and get the shortfall another way?

Not renewing is not the same as leaving.
I am not a lawyer but I would be suprised if they have any rights to get it from you in restrospect.
They have already said they are going to take it from future customers, but you have a free choice over whether you are a future customer.
I would simply do a comparison at the time - if you might forget put it in your diary for a month beforehand.
Who knows other companies might decide to give their staff a payrise, get a nice office, or improve the champgane at the shareholders meeting and put up their prices without telling you.
All you can do is make the comaparison at the time.

Elliot_Shorrick

thank yoiu, very helpful.

angrycrow

Basic contract law applies here. You told them the risk factors and what cover you wanted. They quoted a price to meet your terms which you accepted. Unless they are saying the increase is because you gave misleading details they have to honour the price quoted and can not change the terms part way through the year and bill you later.

There only potential option to alter the terms would be to cancel the contract and refund you in full then start a new contract from that date on but that would be very unlikely.