Car insurance cancellation

alb0679

I am currently insured with 'Geoffrey Insurance'.  My policy is up for renewal in September, however I am picking up a new vehicle next week.  Geoffrey Insurance have advised me they will not insure the new vehicle and that I have to find cover elsewhere.  They propose to bill me a £27 cancellation fee, despite them choosing not to insure me.  where do I stand on refusing to pay the cancellation fee?

Aylesbury_Duck

What do the terms of the contract say about it, and are you prepared to breach the contract if not paying the fee is doing so?

macman

Their decision to decline insuring the new vehicle has no relevance to you cancelling your current policy for a different vehicle. If the t and c's you agreed say the cancellation fee is £27, then that's what you owe.

DullGreyGuy

You need to pay it or choose not to change your car.  You bought a 12 month policy and its you that is driving the change.

Some will "just let the policy run" if the cancellation fee is higher than the remaining premiums however that gets you into a potential world of trouble... there have been two cases on here recently where the person that did that is now facing a 5 figure bill because the new owner didnt buy insurance, had an accident and because the old policy was still in force they had to deal with it as RTA insurer but in doing so they are entitled to recover the monies from their insured.

bris

Insurance policy cancellation fees are pretty standard in the industry, not just car insurance but any.

In my experience the norm was £50 outside the 14 day cooling off period.

Leaving it to run will come with problems in the event of a claim as it would be insured twice, this would open up a huge can of worms with both insurers refusing to pay out.

sheramber

The OP's car will not be insured twice as the original com[any are not insuring the new car.

But the old car will still be insured so  the new owner could claim against that insurance..

DullGreyGuy

sheramber said:

But the old car will still be insured so  the new owner could claim against that insurance..

The new owner couldnt but a third party injured at the fault of the new owner (or whoever else he chooses to let drive the car) could claim against it as the RTA insurers.

As the OP will have breached the terms of his policy by allowing someone without insurance drive his car then his insurers can recover their outlay from him after fullfilling their duty as RTA insurer

Manxman_in_exile

DullGreyGuy said:

... there have been two cases on here recently where the person that did that is now facing a 5 figure bill because the new owner didnt buy insurance, had an accident and because the old policy was still in force they had to deal with it as RTA insurer but in doing so they are entitled to recover the monies from their insured.

Not doubting what you say (you obviously know insurance inside out!) but are you saying that the previous owner of a vehicle could be liable to their insurers if (i) the current owner of the vehicle had failed to insure it, (ii) the vehicle was subsequently involved in an accident, and (iii) the previous owner had failed to cancel their insurance on the vehicle when they sold it?

(I'm aware that the previous owner's insurers would be liable to cover third party losses arising from the accident if the previous owner's policy was the only one on the vehicle, but I didn't realise that the insurers would then be able to recover any payout from the previous owner just because he hadn't cancelled the policy.  Is that the case?  Or have I misunderstood something?)

[Edit: cross-posted with your 4:07pm post]

Manxman_in_exile

DullGreyGuy said:

sheramber said:

But the old car will still be insured so  the new owner could claim against that insurance..

... As the OP will have breached the terms of his policy by allowing someone without insurance drive his car then his insurers can recover their outlay from him after fullfilling their duty as RTA insurer

Is this the key bit?

[Edit:  Has he necessarily let or permitted somebody to drive his car if he simply forgot to cancel the insurance and it's no longer his car?  Sorry - wandering off topic...    ]

DullGreyGuy

Manxman_in_exile said:

DullGreyGuy said:

... there have been two cases on here recently where the person that did that is now facing a 5 figure bill because the new owner didnt buy insurance, had an accident and because the old policy was still in force they had to deal with it as RTA insurer but in doing so they are entitled to recover the monies from their insured.

Not doubting what you say (you obviously know insurance inside out!) but are you saying that the previous owner of a vehicle could be liable to their insurers if (i) the current owner of the vehicle had failed to insure it, (ii) the vehicle was subsequently involved in an accident, and (iii) the previous owner had failed to cancel their insurance on the vehicle when they sold it?

(I'm aware that the previous owner's insurers would be liable to cover third party losses arising from the accident if the previous owner's policy was the only one on the vehicle, but I didn't realise that the insurers would then be able to recover any payout from the previous owner just because he hadn't cancelled the policy.  Is that the case?)

Typically they will be able to recover from their policyholder (the previous owner) or the driver at the time of the accident. To take a random John Lewis Motor policy it states:

If we have to settle a claim under the law of any country and we would not have paid that claim under the terms of the policy, we can recover from you the amount of any payment we have had to make.

The OP will have breached the terms of their policy by failing to keep it up to date and by allowing the new owner to drive it without having insurance. As its not a named driver they dont have cover under the policy and hence this clause is triggered. 

sheramber

not worth it for £27