car insurance scrapped vehicle

[fandangjo]

Hope you can help - I insured a car at the beginning of September and promptly, a few weeks later had a small but expensive accident for which I was liable. A few weeks later still, my old car died and had to be scrapped. I have all the relevant papers. I cancelled the direct debit on the day (Friday) it was scrapped as another installment was due on Monday. Unfortunately I did not immediately call the broker and on the Monday i had a message from them asking why I had cancelled. I returned their call the next day, apologised and explained the situation. No advice was given by the broker accept that she said she would cancel the policy and I thought that my only expense would be the excess (£220) on the policy. I then had a call from head office to find out why I had cancelled the direct debit and I told them that I had explained everything to the branch. They said they had no record of that conversation and that I would have to pay the balance of £400 on the Insurance due to the accident as well as the excess. I was then told that had I insured another car I would not have had to pay the £400. I was not told any of this by the brokers who now deny I spoke to them. I have a record of this call on my phone bill. I can find no small print referring to any of this and believe I was not sent the correct policy documents. The broker has just told me that the reason for cancellation on their records is the non-payment of premiums which is not true. They will not supply my proof of no claims ( full and protected) for a new policy whilst I owe them money. Whilst I can understand some of this it does not seem right. Do I have to just bite the bullet?

[redcrx]

yes. you took out a policy for the full year. the fact that the insurers allowed you to pay it off over that year has no relevence to this. you owe the full year as a balance and with a claim outstanding should not have even tried to cancel it. you owe them the balance plus any excess.

[EDDIE51]

When you insure a car the policy is for a year and the insurance company gets the whole premium immediately. If you pay by instalments what you are doing is repaying the credit provider who payed the premium to the insurer
You can not just cancel the direct debt payments and that is the end of it .
You should have informed the insurance company that the car had been scrapped and asked to cancel the policy. They would have then worked out how much you owed for the time on cover and added a cancelation fee, only then if there was any cash left over would you get a refund or been able to stop the payments.
You are making the mistake of thinking that you pay insurance on a month by month basis , that is not true.

[twix123]

Your policy document or summary should contain a section along the following lines:

"Cancellation

Your right to cancel

If you are dissatisfied with the terms and conditions of your contract, you have the right to cancel your policy back to the original start date. If you decide to cancel your policy in this way, it must be done within the 14 day cooling off period. The 14 day cooling off period commences when the policy is purchased by you. Cancelling your policy in this way will mean that you will not have been covered by us. If your policy is cancelled back to the start date, we will return the premium paid minus an administration fee (which will be imposed by us), provided that no claims or accidents have occurred.

If you do not exercise your right to cancel within the 14 day cooling off period and provided no claims or accidents have occurred, you will be entitled to a refund of the premium paid, subject to a deduction for the time for which you have been covered. This will be calculated on a pro-rata basis for the period you have received cover. There will also be a cancellation fee.

If you exercise your right to cancel outside of the 14 day cooling off period and a claim has occurred, you will not be entitled to a refund of the premium paid and we reserve the right to apply our cancellation fee.

If you have not paid us sufficient money for us to retain premium, or if you have not paid the full annual premium but have had an accident or claim or committed a fraud or made a false declaration, then we reserve the right to recover the money that you owe and apply our cancellation fee."

In particular take note of paragraphs 3 and 4. You are not entitled to any refund as you have made a claim and you owe the insurers the full years premium.