united-kingdom insurance
Car Insurance insisting I pay for the remainder of the year after a no fault crash
<p>A couple of months ago I was in a no fault accident that wrote my car off, I contacted my insurance company and told them about the accident. I was assured that as long as it wasn't my fault my no claims or premium wouldn't be affected. I was made to feel like claiming for the damage was the right thing to do.</p>

<p>In the end the car was written off as it was deemed not worth repairing and I was awarded a £200 payout.</p>

<p>When I then attempted to cancel the insurance I was told I couldn't yet as the claim had not been closed by the underwriter. I left it for a month and continued to pay my premium. Today I was in touch with them again to close the policy and was told I would need to pay a full £600 as I have been paying monthly and would need to pay for the remainder of the year.  Is this legal?</p>

<p>(At no point during the process was I told that this would be the case, the whole time I was made to feel like I was doing the right thing and I now very much feel like I have been conned into giving them more money. I would have been far better off to scrap the car myself, get scrap value and have just canceled the insurance!)</p>

<h2>You have to pay the premium</h2>

<p>You are not buying insurance by the month - you are buying coverage for a year for which you making monthly payments. </p>

<p>At law, your insurer has to pay out for a <em>single</em> claim that happens during that period - most insurance policies contain a reset clause that reinstates the cover after a claim but this only applies if the asset still exists. Insurance law started with insurance of wooden ships on intercontinental voyages where losses were usually total and this ‘accident of history’ informs modern insurance where losses are usually not total. Similarly, being able to cancel the insurance if you dispose of the asset is a creature of the contract and usual practice rather than a legal requirement.</p>

<p>As for “mak[ing] it clear to me” - they did. It’s in the policy which you legally read and understood even if you didn’t actually read it.</p>

<p>Every insurance company has different policies, so you would have to look at the contract you signed with them and establish what cancellation fees they may have.  </p>

<p>The law in the UK gives you a 14 day period to cancel insurance after getting it, but after that you are bound by the contract you signed with the company.
<a href="https://www.confused.com/car-insurance/guides/how-to-cancel-your-car-insurance" rel="nofollow noreferrer">https://www.confused.com/car-insurance/guides/how-to-cancel-your-car-insurance</a></p>

<p>When you ask an insurance company to give you a quotation for insurance, you are asking for two things: </p>

<ol>
<li><p>Them to cover you and your property on a risk basis (the risk being different depending on whether you choose comprehensive or third party only, or any other option, and depending on your specific circumstances as driver) for having one or more claimable events at any point in the insured period</p></li>
<li><p>That cover to be valid for a fixed period of time</p></li>
</ol>

<p>When you agree to take out that cover on the basis of the quotation, the cost required to be paid is the cost for covering the risk of one or more claimable events <strong><em>at any point during the policies life time</em></strong> - whether it be at the start of the policy, or at the end.</p>

<p>You can either pay for the insurance in full, up front, or you can pay for the insurance in monthly instalments - note that paying for the insurance in monthly instalments DOES NOT make the insurance policy a monthly term, <strong><em>you have taken the equivalent of a payment plan for the entire cost of the policy and you need to pay that</em></strong>.</p>

<p>If you feel that you have been miss-sold the insurance on the basis that this was not explained to you (and having worked in the UK consumer insurance industry, you are going to have a hard time proving that - consumer insurance plans are pretty tied down in terms of the legal side of selling it), then you can raise a complaint to that effect firstly with the insurance company involved, and then with the <a href="https://www.financial-ombudsman.org.uk/" rel="nofollow noreferrer">Financial Ombudsman</a>, and ultimately you could pursue your claim through the <a href="https://www.gov.uk/make-court-claim-for-money" rel="nofollow noreferrer">small claims court</a>.</p>
