car insurance - slow learner

phoebe03cat

Having just read Martin's article now realise we have made all classic errors. Gone from broker quote AND taken on annual dd payments. Now seem to think I'm better off waiting for renewal (due January) to use the search engines etc.and then pay outright Is this right please or should we swop now and would anyone kindly explain why its best to swop in Jan if this is the case?

MarkyMarkD

Because insurance is an annual contract. If you cancel half-way through the year, you are still liable to pay the outstanding DD payments for the remaining six months, less any discount they give you for part-year insurance - which won't be pro-rata and could amount to losing nearly all the money.

And you lose a part year's NCD if you cancel part-way through.

I'm assuming you didn't mean "annual DD payments" but "monthly DD payments", but if you have actually paid the whole amount up-front, my advice should be re-written to state that you won't get all your money back, rather than that you'll have an outstanding liability.

phoebe03cat

Thanks so much. Will hang on to renewal. Am rapidly catching up on the basics here! Never too late to learn and this is such a great site. Cheers

MarkyMarkD

Welcome to the site and glad to help, phoebe.

MMD

telly-addict

MarkyMarkD wrote:

Because insurance is an annual contract. If you cancel half-way through the year, you are still liable to pay the outstanding DD payments for the remaining six months, less any discount they give you for part-year insurance - which won't be pro-rata and could amount to losing nearly all the money.

The exact conditions can vary from insurer to insurer - you will need to check the Cancellation condition in the General Conditions in your policy wording.

Generally, you can cancel the insurance at any time during the period of insurance and, provided that you have not made a claim during the current period of insurance, receive a pro rata refund for the unused period of insurance.

But most policies will dictate that no return of premium is due in the first year of insurance. So I'm afarid that you wouldn't get any money back. Ther may also be a similar condition when paying by monthly direct debit.

So I agree with MarkyMarkD that in your circumstances you are better off staying with your current insurer, earning the year's NCD and then moving to another provider at renewal.

Welcome to the site.