Insurance won't cover new car - Where do I stand?

[Kozy]

Just been informed by our broker that our underwriter won't cover our new car, moving up from a Mondeo TDDI estate to an Accord Type R. Difference in the premium is around 12% so not massive, but the underwriters are just being stubborn and refusing to cover it.

The broker has offered to waiver cancellation fees and switch us onto a new policy, but offered an uncompetitive rate in the region of 25% on the next best quote. He informed us that should we wish to take our business elsewhere we will be subject to both the brokers and the underwriters cancellation and admin charges, which I am expecting will probably wipe out most of the pro rata £500 refund we would be expecting.

Is there anything I can do about this, as they effectively have me by the balls here. I was under the impression that if the insurer cannot cover a change such as this then they have to issue a full refund for the unused cover?

I'm seeing the expected change in policy price jump from £200 to over £1k. Absolutely fuming!

[Kozy]

Sorry worded badly, haven't yet bought it, but half committed to do so.

I had (stupidly) assumed that the fact the price difference between the two cars was actually not that much more that it wouldn't be an issue to insure. Underwriters refused to cover, broker can't offer a competitive quote so I'm forced to take the expensive cover or pay up the charges.

I would understand if we were talking about a doubling in premium, but 12%? FFS.

[Kozy]

Doubling of the insurance premium, not the value of the car. The cars are valued at £1000 and £3000 with premiums going from £1250 to £1400. Insurance groups 16 and 17 respectively. On the insurers own terms it's not a massive hike, but the current underwriter just won't cover that type of car, which is not something I was really accounting for. I should have, admittedly.

Just got off the phone and the broker is willing to price match the competitive quote so hopefully we'll have it all sorted now.

Will be buying the car regardless, just trying to minimise the legalised robbery being imposed on me.

Edited by Kozy on Wednesday 28th March 13:19

[Kozy]

ThunderSpook said:

Where did you get this 12% figure from? If it's only 12% more then go with that quote. Unfortunately you purchased a years insurance for a particular vehicle. If that insurer don't have a policy that would cover you for the new car then you are lucky they are offering a part refund. Take the refund and buy a new policy.

The broker we are with quoted £1400 up from £1250 (12%), but the issue is that we are half way through a policy and the current underwriter is having none of it so we need a new policy. This in itself is not an issue, it's the double whammy of cancellation charges I have an issue with.

ThunderSpook said:

Next time (and I'm guessing here by the premiums you've been offered) don't buy something with an R in the name until you are a bit older

Forgive me, I thought 26 was old enough to own a 200bhp family saloon, what with owning a modified 180bhp Civic since 22 and all...

[Kozy]

KrazyIvan said:

I am not sure I am following this.


The broker told you the new car would be £1400 to insure, but the underwriter (as in the actual people who will pay out if you have an accident) are refusing to insure you on the new car. So where did the broker get the figure £1400 from?

Sounds to me like your broker is the issue, not the insurance company, if I follow your posts.

That a side you still only have two choices, pay up or sell up.

Broker could only offer a new policy at £1400 with a different UW, old one on on the Mondeo was £1250 which we need to cancel. Not an issue, but as they were originally uncompetitive with Flux who offered under £1100, we would be subject to both UW and broker cancellation charges, which seemed unfair.

Hopefully all sorted now as they can price match my best quote from Flux which makes the cancellation fees moot as they will simply waive them.

I am rubbish at explaining when I am wound up, apologies.

Edited by Kozy on Wednesday 28th March 13:53

[Kozy]

surveyor said:

I may well be wrong, but I have a hazy recollection that when a company will not underwrite a new car they are obliged to cancel with no cancellation. It might even be in your policy - have a look?

Bingo, this is what I thought was standard practice. A full pro rata refund for the 5 months remaining cover to take elsewhere was my understanding.

[Kozy]

All sorted now, broker provided a reasonable quote with no cancellation fees, so happy Kozy.

Now the properly annoying bit, apparently the FSA are stopping brokers taking instalments in the office. No longer can you split the premium over 4 interest free instalments, you either shell up for the whole (extortionate) premium in one go, or enter into a full credit agreement which will probably end up bumping your premium by at least 25%. WHY? What fking purpose does this restriction impose?!

So much for working to bring the price of insurance down.

[Kozy]

ThunderSpook said:

So let me get this right, if you cancelled that policy and went with another policy still through your broker then they wanted a broker cancellation fee?? I think I'd have cancelled and walked out on principle. Just phone the insurance companies direct, they still have to offer you the same policies.

No, no cancellation fees if I stayed with them, only if I left to take a more competitive quote elsewhere.

kambites said:

It stops those who pay up-front from subsidising those who don't, which has got to be a good thing to my mind. Why on earth should it cost the same to insure by instalments than to pay upfront? It clearly costs the insurance company more to accept instalments because they lose the interest on the premium.

I don't know how it works, it's the broker doing the interest free instalments so far as I can see, no-one 'loses' any money other than the credit providers.

[Kozy]

johnpeat said:

Let's clear this up a bit - they're not refusing to cover the new car, they're just refusing to transfer the existing policy (thus forcing you into taking a less competitive new quote??)

Or cancel altogether and go elsewhere, yes. Sorted now as they've price matched the competitive (still expensive) quote so I can stay with the broker and they'll waiver the cancellation fees.

johnpeat said:

The fees they can levy for cancellation are legally restricted tho and are no way going to come to £500. I can't remember the specifics but it's less than £100 IIRC?

Yes he got back to me with the total charges and it wasn't as bad as I had anticipated. Basically whenever I have to phone insurance I expect to have my bank account cleaned out so was fully expecting them to keep the majority of the refund. Even £100 is still 20% of it though.

Hopefully that is this years piss boiler sorted.