Hi, wonder if someone can help. My wife and I are currently with Asda for our car insurance and are fully paid up (3rd party, fire & theft & it's also insured for business use) until the end of the year. Unfortunately, I wrote off the car a little under a fortnight ago; it was my fault & a claim was made by the other party.

Yesterday we managed to get hold of a replacement car & my wife went online to put it on our policy only to be informed it would cost us an 'additional premium' of around a grand 'up until our renewal'. Now, it was my understanding that, if you have an accident, your premium goes up when you come to renew the policy, not mid-term. Admittedly, I'm hugely naive when it comes to car insurance (I've only been a driver for a few months) but this seems totally a*se-about-face. My wife rang in an attempt to clarify the situation & the person she spoke to said that the extra premiums have been added to the charge because I'm now a 'higher risk'.

Any advice would be appreciated. Obviously, I appreciate we have to pay to add a car to the policy, but I don't understand why I'm being penalised mid-term.

Thanks.

Any no claims discount would be adjusted from renewal, but this would not stop the underwriters applying a loading to the premium from the point you change the vehicle on the policy. Whenever you make a change to a policy, it will pick up the relevant rates for the risk.

If you don't like the extra premium, you can just cancel the policy paying any up whatever is outstanding. If you have a claim on a policy, you have to pay the full years premium. Sometimes, if you cancel they apply short term rates and cancellation fees making it more expensive, than just letting the policy continue. But if you let the policy continue, they won't release any no claim proof until the renewal date is reached, which would make it difficult Insuring the new car elsewhere, if you needed the no claims proof to make the policy affordable.

So in summary, you will have to check the options. How much to cancel the policy now and Insure elsewhere using any no claims proof v continuing the policy with the current company.

Any no claims discount would be adjusted from renewal, but this would not stop the underwriters applying a loading to the premium from the point you change the vehicle on the policy. Whenever you make a change to a policy, it will pick up the relevant rates for the risk.

Ok, but what I'd like to establish is are they entitled to do this?

Again, my wife & I are fully paid up til the New Year, so surely the only reassessment of risk should take place upon the expiration & renewal of the policy, not halfway through the existing term?

Interestingly, as I've been writing this, my wife has just been back on the phone to Asda Online to see if she could get a better explanation. This time, the person she spoke to said the amount was calculated based on the car we were changing to, and mentioned nothing of 'higher risk'. Well, we're replacing our original car, a 2003 Renault Clio, with a 2001 version of the same, so to charge us the best part of £1000 is, well, utterly incongruous!

Yes it is legal. You sign up to a policy covering the risks noted subject to various t&c's. Nowhere will it state that if you change the car on the policy, that the various rating factors will remain the same. This is not noted in the rules of the FSA either.

What most people don't understand, is that when they make some changes to a policy midterm, a re-calculation of the premiums will be done, which will pick up the latest rates and changes to loading factors. So if you change the car or where you live, the premiums will be calculated based on the premium factors on the date of change and not those that applied at the last renewal date.

You could make a complaint about such an increase, when the change of car does not seem to warrant such an increase. Advise them that this does not meet the FSA's Treating Customers Fairly agenda and that you will register a formal complaint with the FOS, if they do not reconsider this. All they have to do is contact their underwriting team and ask one of the ratings analysts to take a look at your policy.

You could make a complaint about such an increase, when the change of car does not seem to warrant such an increase. Advise them that this does not meet the FSA's Treating Customers Fairly agenda and that you will register a formal complaint with the fos, if they do not reconsider this. All they have to do is contact their underwriting team and ask one of the ratings analysts to take a look at your policy.

Right, I shall try that. Thanks very much for your help!