Changing car - insurance question

jewelly

Hi I have just changed cars. The insurance company wanted £85 to transfer my policy to the new car (policy ends in April), or £55 to cancel my existing policy. I’ve taken out a new policy with another company for a year. Is it ok to just let my previous policy stay in place? I paid annually. Thanks.

TELLIT01

Yes you can leave it in place.  If the cost of cancelling is greater than the amount you would get back from cancelling the policy, it is pointless to cancel it.

JJ_Egan

Beware of auto renew on the not wanted policy in April .

FabB

I'd still cancel the original policy. If you don't, then you continue to insure your old car, car A. And I'm guessing, if you have any NCD, these will be on car A, so you can't also use these NCD on car B.

If you've sold it car A, then if the new owner is in an accident, a 3rd party could claim from your old insurer. Which in turn, may mean you have to declare the claim for the next 5 years.

You say the policy runs out in April, so up to you whether to chance it or not. Personally, I'd call the old insurer back and cancel the policy. As for any cost, I'd ask to log complaint as it shouldn't cost more to cancel then to leave it running. This is just my opinion, and I would think it worth a complaint. Or, if I've got a lot going on in my personal life, I might just pay up the extra - this then leaves me free to use any NCD on car B, and I dont have the risk of any claims being made on my old car.

Aretnap

FabB said:

If you've sold it car A, then if the new owner is in an accident, a 3rd party could claim from your old insurer. Which in turn, may mean you have to declare the claim for the next 5 years.

It's actually worse than that. If the new owner doesn't insure the car himself and has an accident, it is possible for your own insurance company to become liable for the damage he has caused - the insurance company with the closest connection to the car is generally responsible for compensating the victim of an uninsured driver. And in turn your insurance company could demand that you repay the losses you have caused them by letting someone else drive your old car while the policy was still in force - potentially many thousands of pounds for a serious accident. This has happened at least once.

https://www.dailyrecord.co.uk/news/scottish-news/scots-biker-insurance-hell-after-4141840

There are some complicated caveats and technicalities to the above, and I believe that in the case above the insurance company did eventually back off. Whether they would have been able to force the customer to pay had they pushed harder has been debated extensively. Personally I wouldn't want to risk finding out for the sake of a £50 cancellation fee.

TBH if you've told the insurer that you've sold the car I'm surprised that they haven't automatically cancelled the policy and sent you an invoice for the cancellation fee.

There's also the NCD point - you can't use your NCD on two policies at a time, which could come back to bite you if you've tried to use it on the new policy and haven't cancelled the old one.

jewelly

Thanks all for the replies. I think I’ll cancel it just to be safe.

Sandtree

TELLIT01 said:

Yes you can leave it in place.  If the cost of cancelling is greater than the amount you would get back from cancelling the policy, it is pointless to cancel it.

Only if you dont need the NCD that the policy had... cannot use NCD on two concurrent policies and so leaving the old one in force blocks reuse of its discount.

Thats the more likely risk but the bigger risk is if the car has an accident and the new keeper hasnt bought insurance then you personally would become liable for unlimited damages to the third parties... not even bankruptcy extinguishes liability for compensation for injuries to others. 

For other classes of insurance it may be more borderline but for Motor I'd not follow @tellit01's advice