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Car Insurance Cancellation
Comments
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The conversation with the agent on the phone was that the premium would increase by £250 to which I replied that I wanted to cancel the policy. They then confirmed that the policy had been cancelled.
I am failing to see how that is anything other than me cancelling the policy?
Surely, given the ramifications of the insurer cancelling the policy, they should have to make it abundantly clear that the options are (a) pay the additional premium or (b) they will cancel the policy? There was no suggestion at any point that it would be 1stC cancelling the policy rather than it being cancelled by me.
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Is a cancellation of insurance recorded on some central insurer database? Is there a way of me obtaining the information on such database so I can ascertain how it has been recorded?
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The trouble is, from your earlier account of the conversation, it is a little ambiguous:
1stC = We can see some of the data you gave appears to be incorrect, please would you clarify?
OP = Oh, sorry, I made a couple of mistakes, so here is the correct information.
1stC = In that case, instead of cancelling your policy, we have run a revised quote based on full disclosure and the extra premium is another £250.
OP = I'm not willing to pay that so please cancel the policy.
1stC = Ok we will cancel the policy now.
I agree that on balance, it seems that they cancelled the policy at your request, but it could be read the other way. Even as I typed that I realise I've used the term "they cancelled".
I believe so, but others may be able to confirm. The problem you have is that when you're applying for insurance in future (including the policy you've just taken out elsewhere), you're asked specifically if you have ever had a policy cancelled or voided. How will you answer that question? If you say yes, you'll find some insurers will decline to cover you, others will load your premium accordingly. If you say no, and the new insurer checks and there is evidence to the contrary, you'll have another cancellation on your record.
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Its recorded in CUE if 1st Central are subscriber, its an optional service and not all partake, some read but dont write too.
https://www.mib.org.uk/about-mib/your-data-and-privacy/ says how to do a SAR to the MIB for data held in CUE2 -
I currently have no idea how I'll answer that question. It is clear to me that the policy was cancelled at my request but if the insurer incorrectly claims otherwise, what am I to do?
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I've had some time to consider this comment in more detail now (I have a newborn, am recovering from an appendectomy and dealing with my wife being bitten by a dog alongside this...).
Are you not conflating owing backdated premiums with giving up a right to cancel the contract yourself?
1. Contract Modification vs. Cancellation
Under UK contract law and FOS standards, if an insurer recalculates a premium from inception due to a careless error, they are offering a contract modification (accepting the risk at a higher price).
While I do owe the prorated recalculation for the days actually on cover, a consumer is never forced to accept an ongoing contract variation. Refusing to pay an additional £290 for future cover and requesting an immediate cancellation means I am rejecting the modified terms. The insurer cannot reclassify my rejection of terms as a forced "insurer cancellation."
2. The Mechanics of Ending Cover Mid-Term
You suggest I would have had to pay the increased premium upfront and then immediately cancel to get a "customer cancellation." This doesn't seem correct.
- If an insurer recalculates cover mid-term, the standard practice is to reconcile the account.
- They calculate the correct premium for the days covered (using the recalculated rate).
- They deduct that amount from whatever you paid upfront and refund/charge the difference.
- The remaining policy is then terminated at the customer's request.
3. FOS Position on Cancellation Markers
The Financial Ombudsman Service (FOS) strictly limits "Insurer-Initiated Cancellation" markers to specific scenarios:
- Where the customer was given a formal 7-day cancellation notice that expired.
- Where the non-disclosure was deliberate/reckless.
- Where the risk was uninsurable (the insurer would not cover you at any price).
Because 1st Central offered me continued cover for £290, they proved the risk was insurable. Because I verbally requested cancellation on the call when presented with the price increase, I pre-empted any formal cancellation notice.
Owing a small backdated premium balance for the days you were covered does not give an insurer free rein to apply a devastating cancellation marker to your record.
As far as I can see, the situation is as below.
- The misrepresentation was careless, not deliberate.
- 1st Central accepted the risk by offering terms for £290.
- I exercised my right to decline those terms and requested cancellation on the 11 August call.
- Therefore, the outcome must be logged as "Cancelled by Policyholder.
I'd be interested if you have any further thoughts on the above or if I am missing something here?
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I'd summarize it thus:
- OP failed to disclose material facts prior to the inception of the policy.
- 1st Central found out about the non-disclosure and recalculated the risk on the basis of the actual, rather than fictional, situation. Recalculated risk was higher.
- 1st Central offered the OP the choice of ponying up for the additional premium or terminating the contract.
- OP chose to terminate.
- 1st Central applied their usual termination fee.
The principal point is the third, in that 1st Central, not the OP, formed the intention to cancel the policy in the event of the additional premium not being paid. This would not, therefore, be a genuine case of policyholder-initiated cancellation.
Policyholder-initiated cancellation would only hold in the scenario of the policyholder making a genuine request to cancel. We can assume the cancellation wasn't 'genuine' in this case, on the proviso that the OP would simply have let the policy continue had the incorrect disclosure not come to light.
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What experience do you have of insurance law and regulations?
The inference you have made at point 3 is not correct. At no point did 1st Central state that my options were pay the premium or they would cancel the policy.
You are analyzing the situation from a traditional contract theory perspective rather than applying the specific consumer protection laws and FOS precedents that govern UK insurance.
Your argument hinges on the idea that if 1st Central threatened to cancel if you didn't pay (which is factually incorrect), the "intention to cancel" belonged to them. As far as I understand it, that argument fails under UK insurance law as set out below.
Under CIDRA an insurer cannot simply invent their own rules for handling a careless misrepresentation. Paragraph 9 of Schedule 1 of CIDRA sets out the exact remedies available to an insurer for a careless error:
- Option A: They can notify you that they will proportionately reduce payouts on future claims.
- Option B: They can issue a formal notice to cancel the contract.
CIDRA does not give insurers an automatic legal right to force an additional premium on a customer. Offering an additional premium is an informal agreement and a consumer is under no legal obligation to accept it.
When 1st Central asked for £250, they were making an offer to vary the contract. Your assertion that my rejecting the £250 means I didn't "genuinely" want to cancel is not right. I see that the FOS explicitly recognizes that a consumer has the absolute right to refuse an additional premium. If you reject the new price and state "I do not agree to this price change, cancel the policy," you are exercising your right to reject a contract variation.
If the consumer requests cancellation before the insurer issues a formal 7-day statutory Notice of Cancellation, the cancellation is initiated by the consumer.
You ignore the real-world impact of cancellation markers. In the UK, an "Insurer-Initiated Cancellation" marker is a severe penalty designed to flag high-risk or fraudulent individual. You are treating this as if 1st Central had the unilateral right to demand £290 or brand me with a cancellation marker. They do not.
By offering cover for an extra £290, 1st Central proved the risk was insurable. I rejected that price variation and requested cancellation on the call. So far as I can see, under FOS guidelines, forcing a cancellation marker onto my record in this scenario is a regulatory error.
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So you are looking at 20 days policy use(which is outside the 14 days cancelation) at the new price. 23 July to 11 Aug.
Not forgetting the interest on the loan to pay the annual policy, as you were paying monthly? Given a mention of a deposit.
Given no mention of the actual yearly cost (only £250 increase) £80 could easily be a cheap ball park figure.
Life in the slow lane0 -
Do you just want somebody to agree with you?
You have the thoughts of others but you do not agree with them.Agree to differ and take your complaint to the ombudsman instead of trying to persuade people to agree with you.
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