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common complaints showing our approach

Jon

 

my insurer didn't tell me they'd cancelled my policy ...

Some people tell us their insurer has cancelled their car insurance policy without any notice - or sometimes without telling them at all. They might find this out when they try to make a claim - or even when they’re stopped by the police.

  • Insurers set terms and conditions about when and how their policies can be cancelled. We’ll check how clearly the insurer explained these when their customer took out the policy - including whether they specifically highlighted any unusual terms and conditions.
  • We’ll also check the insurer has applied their terms and conditions fairly. We’ll ask the insurer why they cancelled the policy - and weigh up whether this was fair and reasonable in the individual circumstances.
  • For example, we might agree it’s fair for a policy to be cancelled if someone had knowingly not paid their premiums - or hadn’t told the insurer important information, that would have meant the insurer wouldn’t cover them. For more information, see our approach to giving the wrong information when buying insurance.
  • On the other hand, in certain situations we might decide it’s unfair to cancel a policy - and tell the insurer to put it back in place. For example, we might find someone’s only missed one payment. Or that they’ve made an honest mistake in what they told the insurer - which wouldn’t have affected the insurer’s decision to cover them.
  • We’ll check that the insurer gave enough notice that they were going to cancel the policy - so their customer had enough time to arrange new insurance. We think that’s at least seven days.
  • Some people tell us they didn’t hear from their insurer at all. Insurers aren’t required to phone their customers - unless their customer has asked them to. But we’ll check they’ve sent written notice by letter or email.
  • Given the serious consequences of driving without insurance, we’ll check that the insurer took reasonable steps to make sure their customer knew their policy has been cancelled. If not - and someone experienced upset or inconvenience as a result - we might tell the insurer to pay compensation.

case study 1

Mr B’s insurer found out he hadn’t mentioned three previous claims when he took out his policy. So cancelled his policy and charged him a cancellation fee.

The insurer said they wouldn’t have insured Mr B if they’d known about the claims. But they agreed he’d made an honest mistake.

We explained to Mr B that we could tell the insurer to “void” the policy instead. This would mean he would get all his premiums back - but he would have a “voidance” on his records. As things stood, with a cancelled policy he hadn’t got all his money back.

Mr B said he would prefer to have all his money back - so we agreed with the insurer that they would “void” his policy.

Claire

 

the cancellation fee is unfair ...

Some people complain to us about the fee they’ve been charged to cancel their car insurance policy. They might say that their insurer didn’t explain that there would be a cancellation fee - or that it shouldn’t apply in their circumstances.

  • We don’t think it’s fair for an insurer to give someone the right to cancel a car insurance policy - but to penalise them financially if they use that right. This approach reflects the law about consumer contracts - which says a contract term is unfair if there’s an imbalance in the parties’ obligations, to the detriment of the consumer.
  • If someone cancels their policy during the “cooling-off” period, there may still be a fee to cover the insurer’s administration costs. This isn’t necessarily unfair. But we’ll check that the insurer made their fees clear - and that the fee is proportionate to the service they’ve provided.
  • If someone cancels their policy outside the cooling-off period, insurers may charge a larger fee. If an insurer has charged more than what we generally see across insurers, we’ll ask them to explain why.
  • The insurer may also refund a proportion of the cost of the insurance - depending on how long the policy has left to run. If the insurer hasn’t refunded the expected proportion of premiums, we’ll ask them to explain why.
  • If we think the insurer has applied the terms and conditions unfairly, we’ll tell the insurer to refund the expected proportion of premiums - less a cancellation fee if appropriate.
  • On the other hand, if someone’s used their insurance to make a claim, we’re likely to say it’s fair for the insurer to keep the premiums.
  • We’ll check the insurer clearly explained how any cancellation fees and refunds would work when their customer took out the policy. If they didn’t, we’ll think about how this affected what their customer did next. For example, if someone had known about the charges, would they have chosen a different policy?

case study 2

Mr J cancelled his policy after two months and three days. The insurer charged him a £50 cancellation fee and a further £200 fee for cancelling his policy before the third month.

We explained to Mr J that - based on what we see among insurers - the £50 fee was reasonable. On the other hand, the extra £200 was equivalent to half his annual premium - whereas he’d been covered for little over two months. We told the insurer to charge Mr J only the proportion of premiums relating to the time they had actually insured him.

Jon

 

I didn't sign up to have my policy auto-renewed ...

I thought my policy was going to be auto-renewed ...

We hear from some people who tell us they didn’t know their policy would be renewed automatically. On the other hand, some people are unhappy that their policy hasn’t been automatically renewed. They may have only found out after trying to make a claim - or even after being stopped by the police for driving without insurance.

  • From what we see, most insurers now give their customers a choice about whether they want their policy to renew automatically. If we find that a policy was set up to be automatically renewed, we’ll make sure that the insurer made this clear - for example, in the policy documents or any discussions they had - when their customer took out the policy.
  • If someone’s unhappy that their policy wasn’t automatically renewed, we’ll look into the insurer’s communication around the time the policy was due to be renewed. We’ll check that the insurer gave their customer enough notice that their cover would be ending soon - and gave clear instructions about how to renew if they wanted to.
  • In some cases, we find the insurer has changed over from auto-renewing a policy - to expecting their customer to contact them to renew. We’ll check the insurer took significant steps to highlight this to their customer.
  • Driving without insurance can have serious consequences. If someone’s policy should have been renewed - and they’ve experienced upset or inconvenience because it wasn’t - we might tell the insurer to pay compensation.

case study 3

Mrs K complained that her policy auto-renewed. She said that she’d specifically asked to opt out of auto-renewal - and that she usually called up to renew her policy.

The insurer showed us that Mrs K’s policy had auto-renewed for the last six years - and that each year, she’d called up a few days after renewal to negotiate a lower price. Neither Mrs K nor the insurer had any record that she’d recently asked for her policy not to auto-renew.

In the circumstances, we didn’t think that the insurer had acted unfairly in auto-renewing the policy.

case study 4

Mr M was pulled over by the police for driving without insurance. He complained that he hasn’t received any renewal notices - and that his policy should have been set up to auto-renew.

The insurer sent us screen-shots showing the date they’d sent out renewal notices. They also sent us phone recordings from when Mr M took out his policy. They’d offered him the option of auto-renewals, and he’d clearly said no. In the circumstances, we decided the insurer hadn’t done anything wrong.

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