Informing car insurance of circumstances change mid-policy

m1chael1

Hi,
I understand that it's a requirement to inform your car insurance of a change of circumstances mid-policy and that they may charge a fee.
I have a theoretical question - Say I paid £500 for an annual policy, and after 6-months there was a change of circumstances that I had to inform my insurer about. The insurer then advises that the increase to the premium would be an additional £300 plus fee.
Would I have a legal right to refuse the payment and instead cancel my insurance (paying appropriate cancellation fee), get a refund for unused period, and then go elsewhere?
If you don't get a refund, what's to stop them increasing the premium by an insane amount, e.g. £10,000, and then everyone cancels and they just pocket the premium for the remainder of the year without providing a service.
A more extreme example: You pay £500 for annual insurance and on 15 day of your insurance, your spouse dies, changing your married status from Married to Single/Widowed. This is something you have no control over and can't anticipate. Would an insurance company have a legal right to say your premium is going to increase by £1000 and if you refuse to pay, cancel your insurance after only 1/2 a month and keep the £500?

paddyandstumpy

You can cancel your policy whenever you want, however there is no 'legal right' so to speak of.

If you have had a fault claim in that policy year you will not get a refund.

You also will not accrue that years NCB.

Expect to pay cancellation fees.

dunstonh

Would I have a legal right to refuse the payment and instead cancel my insurance (paying appropriate cancellation fee), get a refund for unused period, and then go elsewhere?

Technically, there is no legal right to cancel outside of the policy period which is why cancellation rights exist. However, with motor insurance, there will be cancellation terms published which allow it.

So,you are free to cancel your policy at any time subject to their published cancellation terms (usually a fee and a not quite pro-rata refund).

if you bought any addons, these are often non-refundable.

what's to stop them increasing the premium by an insane amount, e.g. £10,000, and then everyone cancels and they just pocket the premium for the remainder of the year without providing a service.

An efficient market which is regulated.

A more extreme example: You pay £500 for annual insurance and on 15 day of your insurance, your spouse dies, changing your married status from Married to Single/Widowed. This is something you have no control over and can't anticipate. Would an insurance company have a legal right to say your premium is going to increase by £1000 and if you refuse to pay, cancel your insurance after only 1/2 a month and keep the £500?

In that scenario, the insurer is likely to leave the premium unchanged until renewal unless it results in a partial refund.

If you decide to cancel then you pay the published cancellation terms.