Car Insurance Cancellation Fees & No Claims Bonus Problem- Please Help

[chinchi]

We signed up for car insurance with Auto Trader (policy provided by Norwich Union) in January, and opted to pay monthly installments.

Our Nissan Micra was stolen at the beginning of April, but we chose not to make any claim (despite being scratched, hot wired) as the vehicle was only an old model M reg, and was found later the same day.

Exactly two weeks later, the same car was stolen again, but this time found burnt out. We contacted Auto Trader who made a note of our claim, and when I asked how much of DH's 7 years NCB would be affected, they told us it would drop two years to make it 5.

We have only just been paid the settlement for the vehicle, which Norwich Union have accepted full responisibilty for the delay, and even refunded the two 29.19 installments that we paid Auto Trader in order for the policy to continue for the claim to be prosessed.

As we no longer have the vehicle, we wish to cancel the policy. DH was told today that the cancellation charge would be 150.00, and his NCB would drop to 3 years and not 5.

He argued that as it was not his fault that he needed to cancel the policy, he was not happy about paying such a large cancellation fee. He also told them that at the time of the original claim, he was told that his NCB would only drop by two years. He was told this afternoon that it would originally have dropped by 2 years, but then again by a further 2.

Can anybody please advise where we stand in all of this? Unfortunately we no longer have the T&C of the policy as they were burnt in the car.

Would this be worth reporting to the Financial Ombudsman? Surely they cannot drop his NCB as they please, and we have already notified the new insurer that he has 5 years NCB, which may mean the policy is invalid if Auto Trader are now claiming he only has 3 years NCB.

Sorry for the long post, but it has been one problem after another regarding insurance this year, and we really would like to sort it asap!

[giraffeski]

Message withdrawn

[chinchi]

That was the fault of DH

Do they charge for a new copy?

[chinchi]

Just re-read your message- the actual insurance certificate was at home, but all the other bumph that comes in the envelope was in the car

[DanJARMouse]

Not sure about the cancellation side of things, but in the world of insurance, 5yrs is the maximum "discount" available and classed as a full NCB.

Therefore, dropping from 7yrs to 5yrs actually makes no difference in premium.

So in the event of a claim, the NCB would be reduced by 2yrs, taking it to 3yrs.

The fact that you were incorrectly informed though is wrong, and their calls should be recorded, and you can demand they listen to the call in which you were advised you would have 5yrs, and they may honour it.

[DanJARMouse]

You can request a copy of the T&C of the policy, shouldnt be a charge. Usually only a charge for duplicate insurance cert.

[chinchi]

Thanks danjarmouse

Its definately worth asking them about their calls.

[blushingm]

most insurance policies will say if they pay out on a claim and the policy is subsequently cancelled them the rest of the years premium would be due - they agreed a provide to cover you for year at a certain cost but you opted to pay in installments. The policy doesn't go month to month but you have agreed to a price for the whole year - often this amount is deducted from your settlement aswell as any excess - you can then normally have a new car and add it to the exsisting policy or they may offer a credit against a new policy with them.

Do you mind me asking why you got a new insurance company and not just put the replacement car on the exsisting policy?

[HappyMummyOfOne]

There is no point in reporting them as they havent done anything wrong. If there maximum bonus is 5 years, then after a claim it would drop to 3 years. If you make a claim on a policy and cancel before the term end the whole premium is due. You would get no refund if you paid in full but if you pay in instalments the balance becomes due. Most let you continue with the instalment plan if you add a new car to the policy.

You were wrong to tell your new insurer that you had 5 years ncb and the premium will change when you advise them it is 3 years not 5.

[claricebeansmum]

I think you also were in violation of your insurance contract for not telling your insurance company that your can had been stolen even if it was later recovered.

[chinchi]

We did tell them the car was stolen, but later phond them and told them we wouldnt be making a claim as the car had been recovered.

We bought a new car and after asking Auto Trader and shopping around, it was cheaper to insure the car with another company. At the time of making the claim for the Micra, we were advised DH's NCB had dropped to 5, it was only yesterday that he was told it had dropped to 3- and are now trying to find out why we were told different in the first place.

We have put in a query with Norwich Union (the insurance provider) as we arent getting anywhere with Auto Trader, so watch this space

[chinchi]

We did tell them the car was stolen, but later phond them and told them we wouldnt be making a claim as the car had been recovered.

We bought a new car and after asking Auto Trader and shopping around, it was cheaper to insure the car with another company. At the time of making the claim for the Micra, we were advised DH's NCB had dropped to 5, it was only yesterday that he was told it had dropped to 3- and are now trying to find out why we were told different in the first place.

We have put in a query with Norwich Union (the insurance provider) as we arent getting anywhere with Auto Trader, so watch this space

[chinchi]

We did tell them the car was stolen, but later phond them and told them we wouldnt be making a claim as the car had been recovered.

We bought a new car and after asking Auto Trader and shopping around, it was cheaper to insure the car with another company. At the time of making the claim for the Micra, we were advised DH's NCB had dropped to 5, it was only yesterday that he was told it had dropped to 3- and are now trying to find out why we were told different in the first place.

We have put in a query with Norwich Union (the insurance provider) as we arent getting anywhere with Auto Trader, so watch this space