About 1 month ago I crashed my car, claimed on the insurance and all was right with the world. Then a couple of weeks ago personal circumstances changed and my wife and I were no longer able to afford the car hire purchase payments. The car went back and as we have no car we tried to cancel the insurance cover. Tesco say that we still have to make the monthly payments until the renewal date (next January) because we've had a claim in this insurance period. I've checked the Ts & Cs and sure enough Condition 5(b) says:

This Policy may be Cancelled or suspended by You at any time by returning the current Certificate of Motor Insurance to Us with seven days notice in writing.

 

Any premium adjustment will be calculated from the date we receive the Certificate from You.

 

Provided no claim or loss has arisen in the current Period of Cover We will:

 

(i) In the event of cancellation, return the premium after applying Our Cancellation Rates shown in the Schedule for the period the Policy has been in force.

So, it's clearly stated that they'd expect the payments to be kept up (as if we'd paid in one lump sum we'd not be entitled to a refund), but is this a fair Condition on a policy? It certainly seems unfair - we're having to pay for insurance on a car we no longer own!

Thanks for any advice you can provide,

Matt.

I am afraid there isn't anything you can do with this one...

By paying monthly you are in effect taking a credit agreement with them,as they request payment up front. As you have claimed, and have been paid, then they are entitled to ask for the full years payment.

sorry

Thanks Craig. Just for the sake of argument, let's say I actually paid them in one lump sum in January 2005. I want to cancel my policy and they say as I've made a claim in that year I'm not entitled to a refund of the 6 months of insurance cover I don't need. Yes, it's clearly stated in the Terms & Conditions that they won't give a refund, but it's still unfair, surely?

Yes!

The Insurance company will reply they have agreed to insure your item from 1/1 - 31/12. The fact that something has happenned to the item mid term is unfortunate, however, they have made a contract with you to cover the item for the fixed term.

So why do they differentiate between a car that's been involved in an accident and one that hasn't? If I hadn't had an accident they'd give me my money back as I no longer have the car. Why does having an accident result in me not receiving a refund?

They have made a payment on the policy, so they feel they are entitled to the years premium.

Insurance is basically a gamble. The underwriters dont want you to make a claim, as the claim will be higher than the premium. As you have claimed, they have lost the gamble. They want their losses to be as low as possible - hence no refund...

If you have claimed on the insurance, this has cost the company money they had to pay out to get it fixed.

They have to recoup this cost so therefore put this clause in, so that they can guarantee you pay the full year up.

Hope this helps!

Lou x

hello..this is angel visiting first time to this site and find it very interesting.

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Angel

Auto Insurance Quotes

i have now sold my car but i pay monthly for my insurance how do you work out how much it will cost to cancell it all together as i dont own the car anymore ??????? many thanks

well that must be one of the bad experiences with insurance company.

consumeractiongroup.co.uk

Can i drive the x-type because as far as im aware my insurance allows me to drive any other vehicle 3rd party

I think you'll find you have third party cover to drive any other insured vehicle.

This topic was closed on 09 March 2019.

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