Motor insurance threatening to cancel over their mistake

[mikeh]

I have an insurance policy through a broker.

Although not entirely relevant to this issue, I had two direct debits bounce earlier this year at which point it was agreed I would pay the outstanding amount in three installments of ~£140.

Last week I phoned to change the car on the policy. I asked them to make it effective from a set time that evening, and once that was all agreed they told me how much extra it was going to be (£157) and how I would like to pay. I asked if I could put it with my next and final instalment - I was told that was absolutely fine and my insurance certificate would be in the post.

A few hours later I call back to ask if we can change the time to earlier, the person on the phone hesitates for a moment and asks if she can call me back.

Ten minutes later I receive a call from the branch manager demanding that I pay the additional premium of £157 immediately. I told him I couldn't pay it right now as I was with the vendor, it was left that we would sort it another time as I was busy and they were nearing close.

I have missed a call from them, which I must be honest I haven't returned because I simply do not have that money right now, but the insurance certificate did show up.

Today, approximately a week later I've received a letter giving me 7 days notice of cancelling my insurance policy because I have not paid the outstanding £157.

Surely once their agent has agreed to the terms of paying the additional premium with my next instalment, they cannot simply go back on that and threaten to cancel my policy with 8 months still remaining on it, which up until the change of vehicle was 75% paid for?

I'm not sure how to progress with this - do I have any rights here? Anything that might help them change their minds or is it simply a case of coming to a compromise (if they are at all willing).

[labman]

Re: Motor insurance threatening to cancel over their mistake

Playing Devil's Advocate, they agreed to the payment, but you then altered that agreement, or asked to alter it if I understand things correctly. If a contract had been formed verbally, did you verbally 'unform' it?

It is normal practice, I think, for variations in premiums due to changing a vehicle to become payable immediately. :beagle:

[mikeh]

Re: Motor insurance threatening to cancel over their mistake

Perhaps, but the alteration was simply changing the time the change was effective from by one hour.

I understand that it's normal practice for additional premiums to be payable immediately (although when policies are paid monthly, it's usually split over the remaining months - I guess I'm in the middle somewhere), I only asked on the off-chance and as soon as they said it was OK, I put the money to use elsewhere.

I fear I may have to swallow my pride and cough up providing I am paid in time (I am expecting to be, but it isn't always like clockwork!). I just wanted to work on the assumption of worst case.

[labman]

Re: Motor insurance threatening to cancel over their mistake

Good luck getting it sorted! :beagle:

[des8]

Re: Motor insurance threatening to cancel over their mistake

I think you must bear in mind that an insurance intermediary (what we used to call a broker) is not an agent for the insurance company, but represents and acts in the interests of the insured. (honest lol)
Hence your comment in your first post:
"Surely once their agent has agreed to the terms of paying the additional premium with my next instalment, they cannot simply go back on that and threaten to cancel my policy with 8 months still remaining on it, which up until the change of vehicle was 75% paid for?" is not quite accurate.

It seems that the broker (acting on your behalf of course) is concerned, because of previous defaults and your not returning his calls) that you ain't going to pay. He had tried to correct an earlier staff error (allowing additional premium to be added to outstanding instalments), You changing the time of the policy change gave him the opportunity, (which IMO he mishandled) and now he's leaning on you to make sure the premium comes in. If you fail to pay and there is a shortfall due to the insurers, he will be having to fund it. He views it that the only way he can ensure that shortfall doesn't occur is by starting the cancellation process for non payment of premium.

Your easiest course of action is to pay up. The next alternative is to visit and discuss. and possibly come to an arrangement.
Allow it to go to cancellation and it will cost more now and in the future when you tell future insurers you've had a policy cancelled.

Finally, if you're unhappy with the outcome, move your business next renewal.

PS of that £157 additional premium, how much was administration charge? Readers of some of my earlier posts know what I think about modern brokers:mmph:

[TUTTSI]

Re: Motor insurance threatening to cancel over their mistake

When I worked in a insurance brokerage many moons ago, if a DD instalment was failed to be met by the insured, the insurers would automatically cancel the policy. The broker could not do this unless he has the certificate of insurance. Today, the brokers are on direct line with the insurance companies and they can now cancel or add to the policy any amendments that need to be done. Brokers or intermediary's only earn a percentage, so for them to loose £160 is a loss in their pocket.


If you do not have the money to pay right now, you wont be able to drive the car uninsured. If you want to keep using the car then you need to borrow the money or phone them and offer to pay over a few months but it is important that you make immediate contact. I certainly would not ignore this request for payment as I don't think it is your interest to have your insurance cancelled and by not returning or answering their calls you are not leaving them with any other option but to cancel your policy.