Insurance company called to cancel my policy their fault!

not2plan

Hi all,

Wanted to post this up to hopefully get some advice on the rather surprising situation I find myself in today.
Earlier I took a phone call from my insurance broker (well known for being great until you need to claim) and they are seeking to cancel my policy due to the underwriter having terms which they didn't make me aware of when I agreed to the policy.

I stress this is not my fault - they did not inform me of this condition of cover at the time when they sold the policy - or I wouldn't have purchased it.

It's a high powered car and they are seeking either prior experience of insuring a car in group 46 or above, or else having owned it for 6 months.
I've owned the car for 3 months and whilst I've driven some pretty fast stuff it's generally been modified so never owned something in that bracket.
Therefore they said they would be seeking to cancel my policy.
So the SHTF as you can imagine.

I've told them that first of all, they've had two months to tell me about this and we are far beyond the cooling off period so they are effectively going to be breaching the contract.
Obviously I would be referring them to the financial ombudsman and insurance ombusman and seek damages if it comes to them admitting they mis-sold it, as they plan to do.

Secondly, what difference does owning the car for 6 months make. If it's parked up and not being driven, that's obviously not giving me any performance vehicle experience.

An arbitrary ownership period is nonsensical and surely irrelevant to driving experience vs what I've actually driven, some of which is faster than this car but not in the bracket.

Thirdly I've reminded them that I've got 4 cars insured with them currently and I frequent many a car forum and have plenty of time to tell my story.

So just wondering if anyone has some experience or ideas I should lay on them so I can stay on cover.
I'm waiting to hear back from "someone higher up" who is looking at it.

I see a possible solution of them seeking cover via a different underwriter and they pay the difference as its' their fault, but they of course haven't offered me anything other than the bad news.

As far as Im concerned this is not a case of not being clear, it's a new term.
It simply didn't exist when I took the policy out. It was never communicated to me. It's not on any of the documents nor was any proof related to it asked for.
They might as well have invented it this morning:

I will be pressing them for proof of it's existence before policy inception.

What I'm mostly concerned about is cancelling my policy and how that may affect me in the future with getting new quotes when they ask you "have you ever had a policy cancelled".
I assume/hope that when it's the insurance company mis-selling it, they have to take the blame and there is no marker against me. If it affects my premiums I will of course be suing them for consequential loss for the next x years and x policies and my time.

Anyway I hope your day is going better than mine, and if you have good experience or industry knowledge and sound advise, please please get in touch over PM or below.

Thanks

Sandtree

not2plan said:

Obviously I would be referring them to the financial ombudsman and insurance ombusman and seek damages if it comes to them admitting they mis-sold it, as they plan to do.

For a start there is only the Financial Ombudsman, no such thing as the Insurance Ombudsman, who cover all financial services including insurance. There is also no "obviously" as you can only escalate to the Financial Ombudsman after receiving a response from the financial services company, or 8 weeks have passed, and the vast majority of complaints are resolved without a need to go to the ombudsman.

Its kind of neither here nor there but would be interesting to know where the problem has occurred, has the insurer forgotten to tell the broker the requirement, has the broker not coded their system correctly having been told the requirement.

Whilst its an irritation I don't see how you are out of pocket if the policy is cancelled without any fees and a true pro-rata refund given (assuming you paid in full in advance) with a letter to confirm it will be treated as a policyholder cancellation rather than insurer cancellation and therefore not having to declare "yes" to the cancelled insurance question. Maybe a token cash for having to spend 10 minutes getting quotes. 

Have you gone to confused.com etc to get a new business quote to compare to what you were paying? Premiums move all the time so could well be cheaper than what you were, especially as you can now declare longer ownership of the vehicle.

not2plan

Thanks for your reply.

You can take a guess that I've not had to deal with the ombudsman before. I've found that threatening the insurance company with it usually resolves the problem. 3 times so far in my driving life.
Not used maliciously, just when they are out of order as now.

The problem appears to be the broker was not aware of it, but I will be asking for an explanation in writing.

I would expect a full refund of the brokerage fees for their advice has proven to be without merit and they charge for it.
It's an assumption that prices might have fallen, they may have gone up. However it was the cheapest policy they offered from a range they obtained, and therefore the least they can do to rectify their mistake is to pay the difference through their broker system which would help to not waste my time further.

If not, then I would seek from them the difference in alternative cover cost for their mis-selling and for my time which is not free.
I will also be down 2 months towards another yr NCB.
I would also not have use of the vehicle if they cancelled the policy until I could obtain another policy, and my other vehicles are not the same use class so not an option to be driven, thus effectively without a car.
I would be "out of pocket" in several ways as a consequence of their mistake.

The way we are dealt with by companies, all of them, is very heavy handed, with punitive costs towards the individual for making mistakes but companies seem to thing they can weasel out of it when it's their fault. I dont understand why people think that's ok?
They exist to profit from us and they seek to do that even when they are at fault.

They are a specialist broker, I have 4 cars with them for a reason. They are the cheapest by far. The usual internet sites were an excessive cost last time, I doubt it's changed by an order of magnitude!
I would have to spend my time (it takes hours like the pre-internet days, not ten minutes)  ringing lots of people till I got a good price but they were the lowest so I would not hold my breath.

Sandtree

not2plan said:

I would expect a full refund of the brokerage fees for their advice has proven to be without merit and they charge for it.

They charged you a fee and gave you advice? Motor is almost exclusively written on a non-advised basis and dont recall anyone paying a motor broker. 

not2plan said:

They are a specialist broker, I have 4 cars with them for a reason. They are the cheapest by far. The usual internet sites were an excessive cost last time, I doubt it's changed by an order of magnitude! 

I would have to spend my time (it takes hours like the pre-internet days, not ten minutes)  ringing lots of people till I got a good price but they were the lowest so I would not hold my breath.

Why do you need a specialist broker? Our Group 50 car was rarely difficult to insure other than in the first two years where its high value meant some insurers wanted a tracker which we didn't have. Even adding the Mrs as a learner to a 4.7L only added £20 to the premiums (could easily have gotten that back charging £1 a photo from everyone snapping the L plated on the car)

Grumpy_chap

not2plan said:

Thanks for your reply.

You can take a guess that I've not had to deal with the ombudsman before. I've found that threatening the insurance company with it usually resolves the problem. 3 times so far in my driving life.
Not used maliciously, just when they are out of order as now.

The problem appears to be the broker was not aware of it, but I will be asking for an explanation in writing.

I would expect a full refund of the brokerage fees for their advice has proven to be without merit and they charge for it.
It's an assumption that prices might have fallen, they may have gone up. However it was the cheapest policy they offered from a range they obtained, and therefore the least they can do to rectify their mistake is to pay the difference through their broker system which would help to not waste my time further.

If not, then I would seek from them the difference in alternative cover cost for their mis-selling and for my time which is not free.
I will also be down 2 months towards another yr NCB.
I would also not have use of the vehicle if they cancelled the policy until I could obtain another policy, and my other vehicles are not the same use class so not an option to be driven, thus effectively without a car.
I would be "out of pocket" in several ways as a consequence of their mistake.

The way we are dealt with by companies, all of them, is very heavy handed, with punitive costs towards the individual for making mistakes but companies seem to thing they can weasel out of it when it's their fault. I dont understand why people think that's ok?
They exist to profit from us and they seek to do that even when they are at fault.

They are a specialist broker, I have 4 cars with them for a reason. They are the cheapest by far. The usual internet sites were an excessive cost last time, I doubt it's changed by an order of magnitude!
I would have to spend my time (it takes hours like the pre-internet days, not ten minutes)  ringing lots of people till I got a good price but they were the lowest so I would not hold my breath.

OP - You shroud every word in mystery making it very hard to read or understand what you are writing, let alone give advice.

What are these mystery vehicles that cannot be used as cars yet are cars?  You contradict the comment of being without a car.

Ectophile

Secondly, what difference does owning the car for 6 months make.

The underwriters have probably seen too many cases where people decide they can now afford the flashy sports car they always wanted, having driven boring family cars for years.  Having bought their new car, they find the nearest windy B road, take it for a blast, and promptly wrap it round a tree.

So they will only insure a car that's been owned for 6 months, assuming that nobody would buy an expensive car and then leave it in the garage for 6 months.

The problem is if the underwriters realise that you don't meet the terms of the policy, then they will cancel the policy - not the broker.  I suspect you never met the requirements of the policy, but the broker failed to check before selling you the policy.  There's nothing the broker can do to stop the cancellation.  Realistically, all the broker can do at this point is find you a new policy ASAP.

Car_54

not2plan said:

They are the cheapest by far. 

And maybe now you know why.

Herzlos

not2plan said:

I would also not have use of the vehicle if they cancelled the policy until I could obtain another policy, and my other vehicles are not the same use class so not an option to be driven, thus effectively without a car.

What's the car and useage class? Surely you can change the class on one of the other vehicles?

The 6 month thing doesn't sound unreasonable from an insurance point of view. You've driven modified cars before so it may not apply to you, but I dare say a lot of drivers of smaller cars and treat themselves to something fast have expensive accidents in the first 6 months. Imagine being used to a 60bhp VW Polo and then upgrading to an M3.


Your only real option is to find another insurer for this car immediately, and then insist that the broker gives you a full refund on the policy. They won't pay you any difference between what you paid them and what you need to pay now, because not everything is equal. You might need a fight via the ombudsman to even get a refund on the 2 months you've already used which would potentially not have even been covered.

DB1904

Herzlos said:

not2plan said:

I would also not have use of the vehicle if they cancelled the policy until I could obtain another policy, and my other vehicles are not the same use class so not an option to be driven, thus effectively without a car.

What's the car and useage class? Surely you can change the class on one of the other vehicles?

The 6 month thing doesn't sound unreasonable from an insurance point of view. You've driven modified cars before so it may not apply to you, but I dare say a lot of drivers of smaller cars and treat themselves to something fast have expensive accidents in the first 6 months. Imagine being used to a 60bhp VW Polo and then upgrading to an M3.


Your only real option is to find another insurer for this car immediately, and then insist that the broker gives you a full refund on the policy. They won't pay you any difference between what you paid them and what you need to pay now, because not everything is equal. You might need a fight via the ombudsman to even get a refund on the 2 months you've already used which would potentially not have even been covered.

At least one poster has imagined that. 

not2plan

Sandtree said:

Why do you need a specialist broker? Our Group 50 car was rarely difficult to insure other than in the first two years where its high value meant some insurers wanted a tracker which we didn't have.

Just the way it seemed to go. My area, the car. The usual factors.
The people that cover my daily (modified) wouldn't insure it - we have two cars with them - just not their business model.
Most others wanted a tracker. The only others given reasonable quote were telematics which would be silly.
I'm not a high risk but the car and the nearby cities are, regardless that I never go there.

When I asked for class1 quote on top of what I am paying it quadrupled.

Grumpy_chap said:

OP - You shroud every word in mystery making it very hard to read or understand what you are writing, let alone give advice.

What are these mystery vehicles that cannot be used as cars yet are cars?  You contradict the comment of being without a car.

Firstly when you quote, try to trim the relevant part, it's been a thing on the internet for 30yrs.

Secondly there is no mystery there is just what you dont understand. Assume this is my only vehicle. Does that make it easier for you?

The fact that I cannot use my other vehicles (a car is a vehicle a vehicle is not always a car) is down to terms of insurance (eg SDP only), or being SORN because it's winter or being worked on and thus undriveable. My daily is currently under going work to fix things spotted on its MOT and beyond. This is the only other vehicle insured for commuting.

Thus I'm without alternative transport as I'm not about to use one for commuting without proper insurance.

Herzlos said:

What's the car and useage class? Surely you can change the class on one of the other vehicles?

Most of my vehicles are not insured for commuting or class1. The only one that is class1 is currently missing it's entire rear subframe as I'm overhauling it. The car with the insurance problem was insured for commuting so I had a backup till yesterday and no plans to go visit anyone for business.
It would have been better not to mention extra vehicles - with hindsight.

For the other vehicles see explanation above. Changing to commuting would mean a brand new policy and prohibitively expensive as well as undesirable to use any for commuting. Changing to class1 would potentially be impossible or easily 4 figures. The way it is with substantially modified vehicles.
Some people are perhaps not aware of limits you can add to make insurance cheaper. Like not driving during rush hours, or driving only on weekends can all make a significant difference. Also some are on lay up cover as it's winter and really only have a 6month policy for actual driving.
But again why people assume it's my responsibility to pay to fix the brokers mistake ? I find that odd.

I get the thing about the 6months ownership, but many a person reading this with a few vehicles or classic cars is scoffing at the idea of not wanting to park up a car for 6months - especially a dream car - as they potentially/probably have a project vehicle which gets MOT'd once a year and barely does 1000miles or doesn't go near a salted road.
I'd make assumptions that those people who think it's odd to park a car up for 6months probably rent their car on a monthly payment for 3years at a time. Cos we can all make silly assumptions.

Herzlos said:

 Imagine being used to a 60bhp VW Polo and then upgrading to an M3.

I get why the insurance company might think it a thing.
I'd just also hope they as a specialist performance underwriter understand power to weight and not just the headline HP figure. because one car I own is faster to 60 than this is for example but is a 2 seater not a 4 door.
No doubt it will be entirely down to claims made and this specific car is falling into the price range where someone would purchase one without a clue how to drive it and how to fund the on going maintenance never mind the petrol so not look after it either.

BTW the M3 will get to 60 faster than this car but this car has more bhp.
Power to weight (and other factors)

Herzlos said:

Your only real option is to find another insurer for this car immediately, and then insist that the broker gives you a full refund on the policy. They won't pay you any difference between what you paid them and what you need to pay now, because not everything is equal. You might need a fight via the ombudsman to even get a refund on the 2 months you've already used which would potentially not have even been covered.

Ectophile said:

The problem is if the underwriters realise that you don't meet the terms of the policy, then they will cancel the policy

the broker failed to check before selling you the policy.  There's nothing the broker can do to stop the cancellation.  Realistically, all the broker can do at this point is find you a new policy ASAP.

I will expect the broker to pay for the difference as they will be finding me the alternative quote or they will be paying for my time to do it.
Insurance is all about putting one back to the position they were in before and covering costs.
A reasonable position to take, not looking to profit but looking to resolve the problem they caused without being worse off.

The broker told me I was still covered for now and they have not cancelled it yet which suggests there is wiggle room and they told me they are looking into that eg other cars I own, experience, etc.
I'm certainly not going to accept a cancellation without redress or solution.

MEM62

not2plan said:

Hi all,

Wanted to post this up to hopefully get some advice on the rather surprising situation I find myself in today.
Earlier I took a phone call from my insurance broker (well known for being great until you need to claim) and they are seeking to cancel my policy due to the underwriter having terms which they didn't make me aware of when I agreed to the policy.

I stress this is not my fault - they did not inform me of this condition of cover at the time when they sold the policy - or I wouldn't have purchased it.

It's a high powered car and they are seeking either prior experience of insuring a car in group 46 or above, or else having owned it for 6 months.
I've owned the car for 3 months and whilst I've driven some pretty fast stuff it's generally been modified so never owned something in that bracket.
Therefore they said they would be seeking to cancel my policy.
So the SHTF as you can imagine.

Was this requirement included anywhere in you policy documents?   If not, you have a case to argue.  If so, you don't have a leg to stand on.  

I've told them that first of all, they've had two months to tell me about this and we are far beyond the cooling off period so they are effectively going to be breaching the contract.
Obviously I would be referring them to the financial ombudsman and insurance ombusman and seek damages if it comes to them admitting they mis-sold it, as they plan to do.

They may or may not be quaking in their boots.    

Secondly, what difference does owning the car for 6 months make. If it's parked up and not being driven, that's obviously not giving me any performance vehicle experience.

An arbitrary ownership period is nonsensical and surely irrelevant to driving experience vs what I've actually driven, some of which is faster than this car but not in the bracket.

Thirdly I've reminded them that I've got 4 cars insured with them currently and I frequent many a car forum and have plenty of time to tell my story.

Whether you consider this requirement to be relevant or necessary is irrelevant to your case.  The underwriter can impose what requirements they see fit.  They do not require you to see the point in them.   

So just wondering if anyone has some experience or ideas I should lay on them so I can stay on cover.
I'm waiting to hear back from "someone higher up" who is looking at it.

I see a possible solution of them seeking cover via a different underwriter and they pay the difference as its' their fault, but they of course haven't offered me anything other than the bad news.

If they have messed up, they may be guarded in what they are telling you.  As for fault, you really need to establish this by proving that the requirement was not stated in the documentation.   

As far as Im concerned this is not a case of not being clear, it's a new term.
It simply didn't exist when I took the policy out. It was never communicated to me. It's not on any of the documents nor was any proof related to it asked for.
They might as well have invented it this morning:

I will be pressing them for proof of it's existence before policy inception.

As above it either was documented or it wasn't.  Underwriters are not able to add the condition after the event.  

What I'm mostly concerned about is cancelling my policy and how that may affect me in the future with getting new quotes when they ask you "have you ever had a policy cancelled".
I assume/hope that when it's the insurance company mis-selling it, they have to take the blame and there is no marker against me. If it affects my premiums I will of course be suing them for consequential loss for the next x years and x policies and my time.

If you have had a policy cancelled, it is bad news as all future ones will either be problematic, expensive or both.  

Anyway I hope your day is going better than mine, and if you have good experience or industry knowledge and sound advise, please please get in touch over PM or below.

Thanks

If you are 100% that this was not raised before and is not included in the original T's and C's you should be OK.  Would be interested to see how it turns out.