Car Insurance Cancellation

TheGreySection

Took out a car insurance policy with 1st Central on 6 July to commence on 23 July.

I realised during the insurance validation process on 11 August that my accident history on the car insurance comparison website used was not correct. As a result:

• I had not disclosed a no fault claim from 2023 (which did not go through my insurer at all but which I notified them of); and
• I listed a 2025 claim as a no fault when my previous insurer had actually recorded it as a fault claim (my parked car was hit by a driver that drove off and was never identified).

After I clarified the above with 1st Central they increased the policy premium by ~£250. I told them I wanted to cancel the policy as I did not accept the increased premium.

They are now saying I owe them £80 (being £40 cover, £50 policy set up fee and £50 cancellation fee less my £60 deposit).

It seems to me that in increasing the policy premium, they have altered a fundamental term of our contract and, as such, I should be able to cancel (or, more accurately, refuse the new terms) without penalty. Is this correct?

The letter makes it clear they will register a default with credit agencies if I fail to pay. Am I best just paying what they have requested or do I have grounds to refuse?

Ayr_Rage

I'd say you are on pretty shaky ground if you did not make a correct declaration when taking out the policy, it is due to your mistakes that the premium was changed, they aren't insuring the same risk.

You are lucky that they did not refuse to cover you which would've meant you have to declare to other companies that you have had a policy cancelled.

You've had cover, cancelled it yourself, so you are now liable for fees as per their Ts and Cs.

Time to take it on the chin and be thankful they didn't void the policy.

XRS200

Unfortunately your understanding is incorrect. They are entitled to charge for the corrections. Check the cancellation is calculated correctly though.

You are entitled to cancel but not without fees.

TadleyBaggie

The policy premium was based on the information you supplied, since that was incorrect, they were entitled to re-evaluate the premium once they became aware of the new information. So cancelling without penalty is not going to happen, I'm sure the fees are in their T&C's.

flaneurs_lobster

What is this "insurance validation process" that happened 3 weeks after the commencement date?

The charges seem perfectly reasonable, if you had given the insurer the correct information at the initial application then the cover quote would have been rejected by you as too high.

You've caused a policy to be raised and the rules allow for charges to be levied if the policy is cancelled.

GrumpyDil

1st Central are known to go through any policies taken out through them with a fine tooth comb looking for any inaccuracies and charging to correct them.

I'd guess that is what OP calls the 'insurance validation process'.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/82110886#Comment_82110886

Also lucky the OP wasn't in a accident and have that expense & cancelled insurance.

TheGreySection

What remedies do 1st Central have for the money they claim they are owed? And what are they likely to do given the quantum (£80)?

Can they report it to credit agencies?

Ayr_Rage

Was the policy set up on a monthly basis with a credit agreement?

If so I believe they can report to a CRA.

Be honest, you owe the fees.

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/82110943#Comment_82110943

They will only be owed that money if the OP cancels the policy.

Credit agencies? Has OP taken out this insurance using an instalment plan?

Aylesbury_Duck

"they have altered a fundamental term of our contract and, as such, I should be able to cancel"

I think you've got this entirely the wrong way round. It's you that altered a fundamental term of the conract (you're a greater risk than you first declared) and as such, they may be able to cancel.

You're lucky they didn't simply cancel the policy. That would have given you difficulty obtaining insurance and certainly increased premiums, for life. If you start mucking about over the £80 you risk making things much worse for yourself.