Insurers Cancelled Policy

A question about : Insurers Cancelled Policy

My wife received a letter today notifying her that as her policy doesn't have a Direct Debit in place, she is in breach of the terms of her policy and if she doesn't set up a direct debit by 23:59 on 17th February (yes, 17th FEBRUARY), the policy will be cancelled.

I am named on her policy as having permission to talk to the insurance company so I have just phoned them and the policy has indeed been cancelled. They claim to have sent the letter on 2nd February as a last ditch attempt at getting the Direct Debit set up.

I queried why a direct debit wasn't active on the policy when I rang them on 5th January to provide my bank account details. They said that as it was not the policy holders bank account, I had to sign a direct debit form and send it back. When I asked why I hadn't been told this when I gave the details, their response was 'we are not required to tell you but you were sent the forms'...funnily we didn't receive them, neither did we receive any letter saying we were behind on payments.

The insurance company have refused to reinstate the policy and as I am at work in her car, I have done the only thing I could in short notice and transferred my policy from my car to my wifes car.

Now, there is an ongoing claim with my wifes policy where I, as named driver, was in an accident that was my fault. The claim has not been settled yet and we have no idea what or how much is being claimed for.

What I need to know is, if we get quotes for a new insurance policy, where does my wife stand with regards to her no claims? Does she still have her original no claims as a claim has not been paid out yet, or does she need to get a policy with zero no claims?

Thanks

Best answers:

• The issue of NCD is going to be relatively small compared to her now having to declare she has had insurance cancelled.
  If the insurer has had any outlay or has RTA obligations towards any third party then the NCD would be reduced. If there was no third party (including the council having to clear the road etc) and nothing has actually been claimed for so far then the incident still must be declared but the NCD would be preserved
• She will have lost some of the no claims, She needs to ask her insurer that cancelled the policy what no claims she has.
  She will need to declare having insurance cancelled though. That rules out a lot of the comparison sites as they usually assume you have never had a policy cancelled. That maybe a problem.
  If there has been a claim on the policy they cancelled then the full premium may still be payable.
  If you make a claim then the full premium us usually payable, I wonder if thats still the case as they cancelled the policy? They may want the full years premium on one payment.
  You need to write to them and make a formal complaint.
• Thanks for the replies.
  Unfortunately my wife only had 1 year no claims anyway but as nothing has been claimed from the other party yet, I was hoping we could get a policy with the no claims, but obviously, if this is not possible, that's completely understandable.
  I have done a quote on Compare The Market and the insurance premium jumps up by Ј700 a year if she declares the previously policy as being cancelled.
  Unfortunatley, having no no claims and now a cancelled policy, the cheapest quote is looking like Ј1722 annually or Ј2241 monthly, and even that's by choosing a Ј1000 excess. Alot of companies will not even quote when ticking that she's had a policy cancelled.
  I will be writing to make a formal complaint, don't you worry. I am absolutely fuming.
  This whole situation is ridiculous. The insurance company didn't seem to care whatsoever. They are claiming to have sent the letter on 2nd February giving us 14 days to arrange direct debit and when I told them we only had the letter today, they didn't care.
• My wife has just emailed me a scan of the letter (as I'm at work). The letter actually states the following:
  Quote:
• An excess of Ј1,000 could well be increasing your premiums
  Whilst it may be counter intuitive insurers work by statistics and you will find some things like very high excesses or TPFT is typically selected by high risk drivers in the assumption it'll be reducing their premiums but because they all cluster around these things it drives their prices up and actually selecting a mid level excess and comprehensive cover can often be cheaper (but not always)
• As you have to pay the full year anyway why not take them up on their offer to let you continue the policy
• I wouldnt trust that about not having to declare it. As above i would get them to reinstate it and carry on the policy.
  Then there wont be an issue of having to declare it.
• Did you not notice yourselves that you hadn't paid anything?
• I have spent the day looking into all the paperwork of my wife's insurance policy and I think we've got a fair right to complain.
  The insurance company use a fixed term credit agreement for the monthly payments and the policy booklet says that if payment is not made on the due date, they have the right to cancel the credit agreement (makes no mention of cancelling the policy).
  In addition, under the section about cancellation, it says the following:
  Quote:
• Now you have done a comparison with the cancellation on it you need to be very careful. Many insurers will assume you are lying if you take it off again, so you should call them and explain what happened when you take out a policy.
• You do not need to write to make a complaint but it helps.
  If you can e-mail then do so. However, you should say that you are confirming the complaint you made by telephone on Friday 20 February. If you can do that tonight, it will confirm that they have until the end of Monday 23 February or it has to go into their complaints procedure and be included in returns to the FCA.
  If you go to the Financial Services Register, you will be able to find the address to send the e-mail. Once you have found the firm, there is a tab on its entry that says "Contact For Complaints".
  Click on that and most insurers have an e-mail address there which should get contact with an organ grinder rather than a monkey.