Car Insurance Cancellation

TheGreySection

https://forums.moneysavingexpert.com/discussion/comment/82115220#Comment_82115220

Thanks, appreciate you breaking down the distinction between the statutory and FOS arbitrage and considerations.

My call with the insurer was at 10:53am and lasted 48 minutes. The letter cancelling the policy was timed at 11:17am so was cancelled during my call (in reality because I asked for it to be cancelled almost immediately on the call).

In your experience, how often have you seen the FOS uphold a complaint specifically on the ground of 'foreseeable harm' when an insurer cancels cover mid-call versus giving a short window (e.g., until midnight or 24–48 hours) to get home/re-insure?

When internal underwriting teams review these non-disclosure cases, how routinely do you see them default to treating a misstatement as 'deliberate/reckless' to justify immediate action, only for FOS to downgrade it to 'careless' upon review?

From an operations or compliance standpoint, what is currently considered the safest operational workflow for an insurer executing a mid-term cancellation during a live call to avoid getting overturned by the Ombudsman?

Any idea of anything I can say or point out to the complaints team to encourage them to back down on insisting it was them that cancelled the policy?

MyRealNameToo

So my operational experience in insurance is claims, so we do get involved non-disclosure cases as for my previous employers they did very few checks at sale and the real checks were done at point of claim. Also worth noting my time in operations was before CIDRA. I have continued to work in insurance since leaving claims but typically at a more strategic level and often dealing with more complex subject matters like actuarial reserving, reinsurance or financial accounting but I maintain an interest in the topic even if its not in the scope of my current work.

I have occasionally be pulled into stuff just as an experienced middle manager but most my clients these days write specialty or commercial insurance rather than consumer but I do have occasional engagements with more household brands that do consumer.


In most the cases I was involved in there was an instant voiding of the policy for a deliberate/reckless non-disclosure or it was a careless non-disclosure that we wouldnt have covered had it been disclosed. My job was particularly fun as I had to get our policyholder to sign paperwork that they are going to reimburse us the third party claim against them… not strictly necessary as often both RTA and policybook already gave us a right of recovery but always good to have a signature saying they realise this.

I have seen a lot of FOS cases since, Im sure you know you can see all cases decided by an actual ombudsman online, and it can really go either way. Some people feel to be really chancing it, saying they thought the BMW branded wheels on the Mercedes were the originals and sometimes the ombudsman agrees that maybe someone buying a second hand car wouldnt check the logo on the wheels whereas other times the ombudsman says it was obvious that blacked out windows both werent original and werent road legal… of cause we dont have the advantage of seeing the photos to see how obvious things are. Clearly if CIDRA gives a right to instantly void a policy the FOS isnt going to require a notice period and that would be pointless anyway as the effect of voiding meaning the policy never existed so a notice period would do nothing.


Evidence is key and sticking to the terms of the policy and ensuring the terms are compliant increases your chances but some things are a bit of a luck of the draw. The wheels example was a a real one, the ombudsman overturned it (wasnt an ombudsman so its not online), I was highly surprised as we werent talking some small label written on the rim but full colour disks in the centre of the wheels… unlikely to be genuine BMW either as far larger and more garish than the standard ones.


Looking at First Central cases, they dont tend to go at it hard, there are multiple cases where someone did a quote with, for example, declaring an accident and points, then did a quote with neither and bought that one. 1C didnt count that as intentional or reckless, despite clearly the customer hadnt 'forgotten' or some other silly excuse. The ombudsman wont go back and see if they think the insurer could have been harsher if it had wanted to.


As to what you can do… prearm yourself… do a SAR to 1C explicitly asking for a transcript of that call or a copy of the recording (give as much detail as you can on time, date, what number you called from, what number you called to etc) and also any notes the agents made into their systems as a result of the call. Get a SAR to MIB to see how the cancellation has been recorded on CUE.

It really depends what out come you are focusing on… if CUE says it was you that cancelled it then you have nothing to declare to others so the argument is only over the £35 difference in cancellation fees. How you construct that is really depending on both the transcript and notes… try to read them with a cool head rather than simply looking for confirmation of your memory, bias can seep in and you read what you want to hear rather than what was really said.

Jumblebumble

https://forums.moneysavingexpert.com/discussion/comment/82115387#Comment_82115387

For what its worth in my opinion this is pretty much the soundest actual advice we have seen on the thread

What we actually know

1FC have charged £50.00 presumably on the basis of their customer agent pressed the button on their screen listing it as a insurer cancellation

What no one on here could possibly know and can therefore can only offer some kind of maybe this or maybe that

Is there a discrepancy between what the agent charged and how 1FC have recorded the cancelation on their own systems and/or with CUE?

What the tape recording of the call will reveal?

What the result of a formal complaint will be?

What the result of a FOS complaint will be?

Only when we actually have the answers to the above 4 questions will anyone know the outcome of this thread

PS I would never buy a policy from them either

TheGreySection

https://forums.moneysavingexpert.com/discussion/comment/82115433#Comment_82115433

Agreed. Some actual advice / insight based on knowledge and experience of the issue at hand. Thanks @MyRealNameToo.

Will update the thread as and when matters progress.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82114961#Comment_82114961

I don't think I have missed the point.

You directly asked "Where is the question pertaining to that on comparison sites?"

I provided the direct answer.

At present, 1stC seem to be of the view that they cancelled the policy.

You are of the view that you cancelled the policy.

That determination will come out once all the evidence is available - call recordings etc - and maybe once the complaint escalation concludes.

In the mean-time, the premium from 1stC increased by £250.

You found a premium close to the original premium via a comparison site.

It may be that these two premiums are not comparing like-for-like if the one on the comparison site has "NO" as the answer to the question "have you ever had insurance cancelled" but the 1stC premium has "YES".

TheGreySection

Call recording has now been provided and the transcript is below.

[First Central Representative - Landa]: You are speaking to Landa from the policy analysis team at First Central, um, which is your insurance provider. I am calling to discuss your policy. Is this the best time to give you a call?

[Policyholder]: Yeah

[First Central Representative - Landa]: —thank you. Um, so just before I can discuss anything further, I would need to complete security if that's okay. Thank you so much. And please for confirmation, am I speaking to Mr. [Name Redacted]?

[Policyholder]: Yeah.

[First Central Representative - Landa]: Thank you. And can you please confirm your date of birth as well as your full address including your postcode?

[Policyholder]: [DOB Redacted], [Address Redacted].

[First Central Representative - Landa]: Thank you. And also please confirm your full contact number.

[Policyholder]: [Phone Redacted].

[First Central Representative - Landa]: Thank you. And lastly, can you confirm your vehicle registration number?

[Policyholder]: [Registration Redacted].

[First Central Representative - Landa]: Thank you so much for that. Okay. Okay. Um so we had requested that you do provide us with some documents um with regards to um validating your policy. So just before I can discuss anything further um with regards to your policy, I would need to read you a quick statement. Okay?

[Policyholder]: Okay.

[First Central Representative - Landa]: Thank you. So by law, insurance companies are required to ask relevant questions. Once asked, the duty of the customer is to disclose information, answer questions accurately, and be careful not to make any misrepresentation. All right. So, can you please confirm um within the last 5 years um how many claims or incidents have you had regardless of fault or whether an actual claim was made or not?

[Policyholder]: Two.

[First Central Representative - Landa]: Two. Okay, bear with me. Let me just quickly note that down. And can you kindly confirm um the dates of both the incidents?

[Policyholder]: No, not off top of my head. No, I sent an email. I sent—I replied to your request and sent a message with the details. I don't know the date of the accident off the top of my head obviously.

[First Central Representative - Landa]: Okay. So, um—okay. So, do you perhaps remember the last incident?

[Policyholder]: Pardon?

[First Central Representative - Landa]: Do you perhaps remember the dates of the last incident?

[Policyholder]: No. Why would I remember the dates of the incident off the top of my head? I—I don't remember off top of my head. I—I—I... what was the point of me sending you the information if you're then just going to ask me again on the phone?

[First Central Representative - Landa]: I will advise you the reason I'm asking.

[Policyholder]: It's the date. It's the dates that I confirmed when I sent it to you yesterday.

[First Central Representative - Landa]: Okay. So, you have confirmed that you've had two claims um in the last 5 years and you have confirmed that you do not remember um the dates of those incidents.

[Policyholder]: No, I can't. But I've sent you the date. I've sent you the date yesterday.

[First Central Representative - Landa]: Okay. So, the reason I'm asking you these questions is because um we do have access to the most database um where all other insurers note down any type of claim that um customers have had whilst insured with them. So you had also stated um on the policy comments that you have had two claims, one date to the January 2025 and one dated to the August 2023. So with regards to the one dated January 2025 on the claims database um the insurer which is Hastings Direct, they did um note down that claim against the name but they had recorded it as a false [sic] and that it has been closed and on the policy you had disclosed the claim as a nonfault.

[Policyholder]: Okay. Well, I—I was—my car was parked and someone ran into me, so I'm not entirely sure how that was my fault.

[First Central Representative - Landa]: Okay. So, um were you able to um track the third party?

[Policyholder]: No, but they drove off.

[First Central Representative - Landa]: Yes. So, most probably that is why they had reported um all the court disclaimer as your fault since they were able to recover the cost from um any other third party as they were the ones who had to pay out and then the one dated August 2023. Um so you had confirmed that incident on your comments but on the policy you had not disclosed that claim.

[Policyholder]: What do you mean?

[First Central Representative - Landa]: You—that claim wasn't added on the policy when it started because it's still within 5 days.

[Policyholder]: Well, I've told you now, haven't I? So what does that mean?

[First Central Representative - Landa]: So we would need to add that claim on the policy as you had also stated that um the third party did um admit liability in terms of the incident so you wanted false [sic] so in terms of the one um dated last year January so as they had disclosed it as a fault and you had confirmed that you haven't received any communication as to how the claim was resolved would it be okay if I uh contact your previous insurer to confirm on their side as to if the claim was disclosed um was closed off as a non-false [sic] or false [sic].

[Policyholder]: Well, it'll be whatever—if you have access to a system that tells you surely it will be whatever that system says.

[First Central Representative - Landa]: No. So, um do not have access to them. I will be calling them so that they can check for me.

[Policyholder]: But you said you—you said that on the system that you have access to that all insurers have access to, it says it was a fault claim. So, what is the point of contacting them?

[First Central Representative - Landa]: Yes. So, the reason I'm saying that we can contact them, it is because you had stated that—

[Policyholder]: —obviously I was wrong, wasn't I? I must have been wrong then. I—I assumed if someone ran into you and drove off while you parked that it would not be my fault, but obviously you're saying otherwise. So if the system—if the insurance system says that it was a fault claim, go with that.

[First Central Representative - Landa]: Okay, no problem. Um so what I would need to do on my side, I would need to change the liability on the system from a nonfault um to a fault for this claim and then add the second one dated um 2033 [sic] August. Is that okay?

[Policyholder]: Yeah.

[First Central Representative - Landa]: Okay. Kindly please bear with me. I'm just going to do that quickly. Bear with me. Okay. All right. So, I'm just waiting for my system to update the information. Okay. So, um I have um amended the liability of um the claim on the policy and also added the one dated um August 2023. So, if I do both of those amendments on the policy, um it does generate an additional cost which is £290.35 which also include £50 amendment fee.

[Policyholder]: Cancel the—cancel the policy.

[First Central Representative - Landa]: You want to cancel the policy?

[Policyholder]: Yeah. 100%. Yeah.

[First Central Representative - Landa]: Okay. And effectively from when would you want the policy to be cancelled?

[Policyholder]: Immediately.

[First Central Representative - Landa]: Sorry?

[Policyholder]: Now. Immediately.

[First Central Representative - Landa]: Immediately. Okay. One second. Bear with me. I'm just going to run the cancellation quotes for you.

[Policyholder]: You're not charging me to cancel. You've changed the terms of what you're asking me to pay. I'm not paying any cancellation fee. I need you to cancel the policy now with no cancellation fee.

[First Central Representative - Landa]: Unfortunately, sir, if you are outside the 14-day cooling off period, then the £50 cancellation fee is applicable.

[Policyholder]: The cooling off period restarts when you ask me for more money for my insurance. You have reset the cooling off period as of this phone call and I'll need to speak to your manager if you can't do this.

[First Central Representative - Landa]: So cooling off period is 14 days when the policy started. So if you're outside 14 days then the cancellation fee changed. We haven't changed the terms. We updated the policy.

[Policyholder]: Which terms? Speak to your manager. I need to speak to your man—the price of the policy has changed. I need to speak to your manager.

[First Central Representative - Landa]: We didn't change the price. I said we amended the information on the policy.

[Policyholder]: I need to speak to your manager.

[First Central Representative - Landa]: I can arrange a call back for you.

[Policyholder]: Okay. I'm not paying a cancellation fee and I want to cancel the policy now.

[First Central Representative - Landa]: Okay, bear with me.

[Policyholder]: Hello.

[First Central Manager - Uguru]: Good day. You're speaking to Uguru, one of the managers at First Central. How can I help?

[Policyholder]: Um, I've just been called by one of your agents saying that the information I gave when I took out the policy wasn't quite right and asking to pay an additional 250 quid. And I have said that I want to cancel the policy, but I am not willing to pay a cancellation fee because you have changed the terms that have been offered. So, I don't think I should have to pay a cancellation fee. And I don't think that's in line with consumer law. Okay.

[First Central Manager - Uguru]: Oh no sir. With regards to the policy, there is no terms which have been changed cuz when I look at the policy, I see that what was in question, it was a claims history. So the incident—

[Policyholder]: —changed the price of the policy. You changed the price of the policy.

[First Central Manager - Uguru]: Yes, sir. Because—

[Policyholder]: —that from the outset, I would—I wouldn't have taken it out. So I want you to cancel it, but I'm not paying a cancellation fee.

[First Central Manager - Uguru]: Well, the reason why I say it is changing is because some of the [information] was not declared correctly. So when we—we had to now—

[Policyholder] and now it is—and now you give me the price and I'm not willing to pay it. So you can cancel the policy and I'm do not authorize to take a cancellation fee.

[First Central Manager - Uguru]: Okay. With regards to the cancellation, the cancellation fee it does stand together with all the costs for the cancellation. Now as you are advising if you—

[Policyholder]: —I don't care what it—I don't care. I'm not paying it.

[First Central Manager - Uguru]: Certainly, sir, no problem. Sir, if you do not wish to pay it, what happens sir on our side because you want the policy to be canceled? We will then be sending this amount as an outstanding balance and the policy will then be handed over through to our collections department, sir.

[Policyholder]: Fine. Go for it.

[First Central Manager - Uguru]: Not a problem, sir. No, I will make note of it on the policy as advised.

[Policyholder]: What's the cancellation fee?

[First Central Manager - Uguru]: Okay. So, looking at the policy, I see that you requested for the policy to be canceled today. Is this correct?

[Policyholder]: Yeah.

[First Central Manager - Uguru]: Okay. So, I'm just going to give you the full cancellation breakdown, sir. So, the cancellation breakdown is as follows. So, if the policy cancels today for 20 days of cover, the amount is £33.70. On your policy, the interest for paying monthly is £7.03. The arrangement fee for getting the policy started is £50 and the cancellation fee is £50. So, that is a total of £140.73. You have already made a payment deposit of £80 [sic]. You have already made a deposit payment of £60.51. So from that £140.73, we will minus the £60.51 and still due to cancel the policies in an amount of £80.22.

[Policyholder]: So for the sake of 80 quid, you're going to send it to debt collection.

[First Central Manager - Uguru]: You was correct. So that is our process.

[Policyholder]: Do you know this is not in line with consumers who are earning—offering a policy at a price? The information I have given you has changed. You have offered me a different price and I have refused that price. You cannot leave a consumer with the options of paying 260 quid for an increased policy or paying 80 quid cancellation fee. That is—that is not in line with consumer law.

[First Central Manager - Uguru]: Well, with regards to the policy, so the validation it also states that you need to have a look at your policy documentation and ensure that all that information is in order because at any time when you cannot—cannot oblige me to pay more money for a policy. You—you just can't say you have that option to cancel as—

[Policyholder]: —Yeah, I have the option to cancel and it should be free.

[First Central Manager - Uguru]: No, sir, you are charged for [the time] that policy was active.

[Policyholder]: If you try and levy a cancellation fee in these circumstances, it is not in line with consumer law.

[First Central Manager - Uguru]: Well, so with regard to fees, all of it, sir, it is noted and stated in your policy wordings.

[Policyholder]: It doesn't matter. You can put whatever you want in the policy wording. If it's not in line with consumer law, it's not in line with consumer law.

[First Central Manager - Uguru]: Well, so with regards to the terms of the contract which you took with uh with First Central, so it did stipulate that in the event if the policy would be canceled after 14 days, cancellation fees are applicable.

[Policyholder]: Yes, but I'm canceling it because you have changed the price.

[First Central Manager - Uguru]: Yes. And you are canceling the policy within the validation cycle. So for that case, the policy was active on cover as well as any fees applicable, you are charged for that, sir.

[Policyholder]: But I'm canceling the policy because you're trying to charge me like a 250 quid.

[First Central Manager - Uguru]: Well, because of the information we provided—change my mind.

[Policyholder]: Exactly. I'm canceling it because you're trying to change the terms.

[First Central Manager - Uguru]: Yes. Because you see that we are not trying to change the terms. Had the correct information been provided, this would have been the price which you would have been charged—that you would have been given a different premium. So the premium is to ensure that your policy is in—

[Policyholder]: —and I—and I wouldn't have taken—and I wouldn't have taken the policy.

[First Central Manager - Uguru]: Correct. And that is why I said that as advised, you do have the option to cancel the policy based on its original terms.

[Policyholder]: I'm not paying a cancellation fee because you have changed the terms of the policy. You have changed the terms of what we have agreed. I'm not then paying a cancellation fee to get out of the policy. That is not in line with consumer law. It just isn't.

[First Central Manager - Uguru]: Yeah. Yes. Like—like as I advise, I do understand, sir, but however, I did advise you of that process.

[Policyholder]: Cancel the cancellation fee. Cancel the cancellation fee too.

[First Central Manager - Uguru]: No, sir. Cancellation fees and the cancellation expense. The cost of the total cancellation expense, I'm not able to um cancel the cancellation fee.

[Policyholder]: All right. I do not authorize you to take any payments in respect of the cancellation fee or any further payments for my account.

[First Central Manager - Uguru]: Yes, like I advise, there is no payments that will be taken. The payment will be set into an outstanding balance and it will be handed over to our collections department.

[Policyholder]: This is absolutely scandalous.

[First Central Manager - Uguru]: I apologize sir you feel that way sir but however that is the process.

[Policyholder]: I have the details of your legal department please.

[First Central Manager - Uguru]: Sorry?

[Policyholder]: I need the details of your legal department.

[First Central Manager - Uguru]: Legal department. Not a problem sir. I will get the lady to assist you and then put in a formal complaint through for you sir because that is where they will—

[Policyholder]: —complain. I—I don't want the complaint. I want the details of your legal department.

[First Central Manager - Uguru]: If you may just hold on that. I'm not quite sure if we are able to keep that out. If you may hold on I need to find out on that, sir.

Aylesbury_Duck

Seems clear from all of that that the policy was cancelled at your insistence, not theirs. The only ambiguity is whether what's happened counts as having "special terms imposed" or whatever the question refers to, ie. Does the increase in premium pertaining to your incorrect declarations count as a special term, or is it deemed that the revised premium was an offer of a replacement contract that you declined?

I'd say that the transcript is helpful, but you still need confirmation that this hasn't been recorded as a cancelled policy or one where special terms were imposed. In other words, confirmation you can wave in front of a future insurer if something comes up as a marker on that shared database.

TheGreySection

https://forums.moneysavingexpert.com/discussion/comment/82116192#Comment_82116192

Hoping I get that final piece of the puzzle when I receive a response to my complaint or the DSAR from MIB.

If they have recorded it as a insurer cancellation, I'm hoping their complaints / legal team see from the call that it was unequivocally me that cancelled the policy and update their and the database accordingly rather than stumping up for the ombudsman costs.