Car insurance provider cancels insurance after 1 day and requires me to pay half the policy value.

KG

I have just been 'stung' by a cancellation charge from an insurance provider after they went through my application line by line asking me really detailed questions and then decided not to cover me because I quoted a slightly lower value from what I had input in the application form. (see full story in link below)

I *get* that this might mean they cannot insure the car if it falls below a certain value. And, for the record, I wasn't trying to con anyone, I didn't have the form in front of me and was just giving a ball park figure. However, to be told you have to pay more than half the value of the policy (after insurance premium tax) seems outrageous.

They finally reduced the fee to £28 when I told them it sounded like this was some kind of scam - but I am still £28 out of pocket.

Do I have any rights here - like with banks they can only charge reasonable charges for work involved?

https://forums.moneysavingexpert.com/discussion/comment/75499021#Comment_75499021

EDIT

Following comments below, I have recieved confirmation from the insurance company that, as the cancellation was agreed between me and them over the phone, rather than the company deciding independently to cancel the insurance and the informing me, that this will not show on my record and I am not obliged to disclose this when applying for insurance in the future.

KatrinaWaves

Are they saying that you committed fraud in your application or something? Why did the policy start and THEN get scrutinised and cancelled?

Gavin83

Why do you need two topics for this?

Anyway the cancellation charge is the least of your worries. Having your insurance cancelled is one of the worst things that can happen for your insurance premiums, it's likely to cost you thousands, if not tens of thousands going forward. I'd speak to them and see if you can get it reinstated.

KG

KatrinaWaves wrote: »

Are they saying that you committed fraud in your application or something? Why did the policy start and THEN get scrutinised and cancelled?

I didn't have the form in front of me to see how much the comparison site said it was valued at and I gave them a ballpark figure which was lower than the form. That was too low a value for them to insure. Which I understand. I would even understand an admin fee of a tenner - but over £50???

KG

Gavin83 wrote: »

Why do you need two topics for this?

Anyway the cancellation charge is the least of your worries. Having your insurance cancelled is one of the worst things that can happen for your insurance premiums, it's likely to cost you thousands, if not tens of thousands going forward. I'd speak to them and see if you can get it reinstated.

Because 1 thread is asking if this has happened to any one else and one is asking about my consumer rights...

I have checked with my new insurance company and they have said (from the chat transcript):

"Ah okay, no this will be fine. If the other insurer could not cover due to the value of the car this will not be an issue. We would only need to be made aware if you had insurance cancelled or void for reasons such as missed payments."

giraffe69

Whatever the rights and wrongs of cancellation it does seem less than optimal to guess answers to questions relating to insurance because you haven't got the forms in front of you. How about having them in good time before you apply/fill in a form?

KatrinaWaves

KG wrote: »

"Ah okay, no this will be fine. If the other insurer could not cover due to the value of the car this will not be an issue. We would only need to be made aware if you had insurance cancelled or void for reasons such as missed payments."

This implies you said 'my other insurance company couldnt cover me because of the value, not 'I gave the wrong figure on my initial application and now it has been cancelled because the figure was wrong and they now are aware they cannot cover this value car.'

KG

I have recieved confirmation from the insurance company that, as the cancellation was agreed between me and them over the phone, rather than the company deciding independently to cancel the insurance and the informing me, that this will not show on my record and I am not obliged to disclose this when applying for insurance in the future.

I will edit the OP to clarify this.

KG

giraffe69 wrote: »

Whatever the rights and wrongs of cancellation it does seem less than optimal to guess answers to questions relating to insurance because you haven't got the forms in front of you. How about having them in good time before you apply/fill in a form?

How about not making an assumption that I didn't get a quote in good time?

How about actually trying to answer the question asked rather than lecture folk like someone who has never made a ,minor error in their life...

eddddy

KG wrote: »

They finally reduced the fee to £28 when I told them it sounded like this was some kind of scam - but I am still £28 out of pocket.

Do I have any rights here - like with banks they can only charge reasonable charges for work involved?

In general, you can escalate a complaint to the Financial Ombudsman if you think an insurance company are treating you unfairly.


However, the Financial Ombudsman suggests that a cancellation fee of up to £50 is standard/reasonable - so you probably wouldn't get anywhere with that.