Changing vehicle mid insurance policy

Mahey

I am insured with KennCo through a broker and was hapy with the price paid but I have changed my car from a 05 Renault Laguna to a 07 Volvo S80 and for the remaining 6 months on the policy I have been hit with a EUR122 premium... Seemed excessive (original policy was EUR440) so I queried it, seems the Volvo is SSSOOOO much more powerful that I am now a much bigger risk - there was me thinking that going to a MUCH SAFER car would make be a better proposition for an insurer. I expected some increase on the basis of the higher value as I'm Comprehensive.

I'm male, 38, driving on a mix of my own insurance and company car since 1996 - No Claim - No penalty points - live in the midlands...

Here's the kicker - if I want to cancel my policy with KennCo which has 6 months left on it - I have to pay them 50 odd quid for the priviledge on top of losing the 6 months of insurance.

Are there any rules or even recommended practice for what an insurer can or cannot do in such a case?

chris85

Mahey wrote: »

I am insured with KennCo through a broker and was hapy with the price paid but I have changed my car from a 05 Renault Laguna to a 07 Volvo S80 and for the remaining 6 months on the policy I have been hit with a EUR122 premium... Seemed excessive (original policy was EUR440) so I queried it, seems the Volvo is SSSOOOO much more powerful that I am now a much bigger risk - there was me thinking that going to a MUCH SAFER car would make be a better proposition for an insurer. I expected some increase on the basis of the higher value as I'm Comprehensive.

I'm male, 38, driving on a mix of my own insurance and company car since 1996 - No Claim - No penalty points - live in the midlands...

Here's the kicker - if I want to cancel my policy with KennCo which has 6 months left on it - I have to pay them 50 odd quid for the priviledge on top of losing the 6 months of insurance.

Are there any rules or even recommended practice for what an insurer can or cannot do in such a case?

Some insurers have a cancellation charge and some dont. Unfortunately the customer should be making themselves aware of this when taking out the policy. Its something I always check anyways but understand many dont.

in terms of the premium going up. This is very normal. You have a newer car which a bigger engine and thus higher premium. This are the main factors but also things like cost to repair and other things would contribute.

Mahey

Thanks Chris, yeah, I was expecting some charge but as I say, 25% seemed excessive but I take your point...

The cancellation charge seems very harsh though, here's what I have to do:
Pay the additional EUR122 (don't know why)
Cancel the policy officially
Wait for a refund of EUR49

Over a barrel springs to mind but there is no doubt that they will not be getting my future business regardless of how this transpires and as we all know, "have a bad experience, tell 10 people - have a good experience, tell 1"

oldyouth

Sorry, I don't follow the maths. The premium is €440, you have 6 months left on your policy, so that's €220 return premium, less €50 cancellation charge leaving you with €170. Is that not it?

Mahey

oldyouth wrote: »

Sorry, I don't follow the maths. The premium is €440, you have 6 months left on your policy, so that's €220 return premium, less €50 cancellation charge leaving you with €170. Is that not it?

You'd think...

Paid €440 originally for 12 month period
6 months in I've changed the car
Additional €122 now due for remaining 6 months of policy due to change of car
If I want to cancel the insurance amicably, I have to pay the additional €122 now, submit a cancellation request and then they will refund €49

Basically I either pay the additional charge thay they have arbitrarily decided or I lose out on 6 months insurance...

oldyouth

I think something is getting lost in the conversation with your insurers. You are entitled to the unused portion of everything you've paid so far this year back if you cancel your insurance, less the €50 cancellation charge. I suggest you have another chat with them.

EauRouge79

oldyouth wrote: »

I think something is getting lost in the conversation with your insurers. You are entitled to the unused portion of everything you've paid so far this year back if you cancel your insurance, less the €50 cancellation charge. I suggest you have another chat with them.

+1 - definite miscommunication there.

The cancellation charge is normal for insurers if the policy is cancelled in the 1st year. If you changed to KennCo this year and are changing mid-term they will charge a fee.
This is to deter people from taking out short term policies, ie insuring a car for a few months then cancelling. Short term policies are not available on the irish market as far as I know.

chris85

oldyouth wrote: »

I think something is getting lost in the conversation with your insurers. You are entitled to the unused portion of everything you've paid so far this year back if you cancel your insurance, less the €50 cancellation charge. I suggest you have another chat with them.

Yeah thats what the OP should be getting back. Definitely.

Mahey

Thanks folks, I'll go back to them again and get confirmation, watch this space.

Otis Driftwood

Sounds like they're applying short term rates which is common practice if it's your first year with an insurance company.

Mahey

Otis Driftwood wrote: »

Sounds like they're applying short term rates which is common practice if it's your first year with an insurance company.

Yes, I believe this is the case but the figures provided earlier have been confirmed again by the broker, I'll have it in writing shortly.

Seems like they are taking a very short term view here, they're definitely losing 1 customer and they are at a high risk of losing my previous employers business and anybody else who'll listen and agree that this is harsh. Bear in mind, I want to ke
ep my current policy in place but not at approx 50% policy increase for driving a safer car. Is the fact that they would effectively charge me to cancel mid-term bordering on being a but of a racket?

oldyouth

All insurers are obliged to provide you with their Terms Of Business. Make sure this matches what they put in writing to you. Post up the details of the letter when you get it for further opinion

Otis Driftwood

Mahey wrote: »

Yes, I believe this is the case but the figures provided earlier have been confirmed again by the broker, I'll have it in writing shortly.

Seems like they are taking a very short term view here, they're definitely losing 1 customer and they are at a high risk of losing my previous employers business and anybody else who'll listen and agree that this is harsh. Bear in mind, I want to ke
ep my current policy in place but not at approx 50% policy increase for driving a safer car. Is the fact that they would effectively charge me to cancel mid-term bordering on being a but of a racket?

Im not quite sure you fully understand the insurance process mate.

Just because your car is "safer" for you as the driver,its a higher risk for the insurer.

Bigger engined,more valuable,replacement parts would be more expensive etc.

It matters not a jot how safe you think the car is for you,its ultimately the risk towards the third party that you are rated on.

If your car has a bigger engine,in general it can travel faster.If it travels faster its more likely to be involved in an accident.

If its involved in an accident at a higher speed the the likelihood of it being a serious accident is higher.

Do you get what I mean?

Mahey

Otis Driftwood wrote: »

Im not quite sure you fully understand the insurance process mate.

You may be right, maybe I should stop trying to apply logic to this and just bend over.

Otis Driftwood wrote: »

Just because your car is "safer" for you as the driver,its a higher risk for the insurer.

Safer for me, less chance of a crash, safer for others, less risk for the insurer in my mind.

Otis Driftwood wrote: »

Bigger engined,more valuable,replacement parts would be more expensive etc.

This bit I understand and accept and as in my first post, I expected some increase, was surprised at how much...

Otis Driftwood wrote: »

It matters not a jot how safe you think the car is for you,its ultimately the risk towards the third party that you are rated on.

My age and driving experience is more relevant to that than the car I'm driving, I've averaged 50,000 miles per year for the past 10 years, zero points, no claim...

Otis Driftwood wrote: »

If your car has a bigger engine,in general it can travel faster.If it travels faster its more likely to be involved in an accident.

I've driven lots of cars in my "career", never met one yet that wasn't able to go as fast as I asked it to - in other words, just because the car can go faster, doesn't say it's going to. I reckon I could have got 100mph comfortably out of the Laguna and at that stage I don't think it matters what car you are in - the driver is more relevant than the car and I have the history to back that up.

Otis Driftwood wrote: »

If its involved in an accident at a higher speed the the likelihood of it being a serious accident is higher.

The car will only go as fast as I drive it and I don't ever envisage driving faster than what the Laguna, IS220D, S40, Laguna (different one), Vectra, 323F (1.8 petrol, little bullet), Carina E (2.0D), Kadett would all have been capable of so I revert to my previous point.

Otis Driftwood wrote: »

Do you get what I mean?

Loud and clear - you get what I mean?

Mahey

oldyouth wrote: »

All insurers are obliged to provide you with their Terms Of Business. Make sure this matches what they put in writing to you. Post up the details of the letter when you get it for further opinion

The letter arrived today, direct from KennCo, advising that the policy will be cancelled 7 days from issue date of letter. They were also kind enough to let the Dept of Env know on my behalf...

Funny little point, I made 2 queries:
1. How much extra for the S80?
2. How much of a refund would I get if I cancel?

I asked for confirmation of both figures in writing in case I was misunderstanding - they have decided only to quote for the extra cost and issue a cancellation letter....

Pablo Sanchez

Mahey wrote: »

You may be right, maybe I should stop trying to apply logic to this and just bend over.

You might not like what you hear but its not a bad idea to listen to someone who knows what they are talking about.

Mahey

Pablo Sanchez wrote: »

You might not like what you hear but its not a bad idea to listen to someone who knows what they are talking about.

Dead right Pablo and I hope that my comment didn't come across as having a go at someone who is trying to help, more trying to make the point that if you just shut up and don't query stuff then you'll get rode every time. I have no doubt that most if not all the people who have responded know more about this than me as I've been lucky enough to have done a lot of company car driving in my time and thankfully had little to do with insurance companies... Apart from the time the house was broken into and they told me I wasn't covered on that day - but that's a different story...

Apologies to anyone who felt I was having a dig....

Pablo Sanchez

Mahey wrote: »

Dead right Pablo and I hope that my comment didn't come across as having a go at someone who is trying to help, more trying to make the point that if you just shut up and don't query stuff then you'll get rode every time. I have no doubt that most if not all the people who have responded know more about this than me as I've been lucky enough to have done a lot of company car driving in my time and thankfully had little to do with insurance companies... Apart from the time the house was broken into and they told me I wasn't covered on that day - but that's a different story...

Apologies to anyone who felt I was having a dig....

Its fair to say that many of your points are logically correct, increased safety etc, however unfortunatly thats not how the insurance companies necessarily see it. You will almost always pay more to insure a larger, more powerful, more expensive car. They punch the numbers on these things and have built up years of underwriting/claims stats that guide their rates.

Thats not to say you shouldnt always shop around and get the best rates you can, its your duty as a consumer to keep them on their toes!

oldyouth

Mahey wrote: »

The letter arrived today, direct from KennCo, advising that the policy will be cancelled 7 days from issue date of letter. They were also kind enough to let the Dept of Env know on my behalf...

Funny little point, I made 2 queries:
1. How much extra for the S80?
2. How much of a refund would I get if I cancel?

I asked for confirmation of both figures in writing in case I was misunderstanding - they have decided only to quote for the extra cost and issue a cancellation letter....

I don't want to add to your difficulties, but by insurers advising that the policy will be cancelled in 7 days and the Dept of Environment being notified, sounds like an IMPOSED cancellation by them. If this is the case, you need to declare that fact to all future insurers for consideration. Did you not request the cancellation yourself? I'd check it out.

In the conditions of your policy, there should be a clause that states if insurers exercise the cancellation clause, they must refund the unused premium

gandalf

Have you checked with other insurers to see what the going rate is for the car. That will give you a clearer idea if they are dealing with you in a fair manner or not. If the prices quoted are lower if gives a good basis to argue your cost down with them as well.

Mahey

I had a look at other insurers and they're in around the same price give or take, some cheaper some not, given that I'd lose 6 months insurance +70 odd euro, I've no choice but to go back with KennCo - it'll be a struggle for me to renew with them though.

For what it's worth, the broker, feels I have been hard done by but then again, she wants to retain my business so probably saying what I want to hear...

For the record, the escuse was that they were quoting me short term rates - first I've ever heard of short term rates.

Pythia

At the end of the day, accident statistics which the insurer will have collected over time, re both frequency of claim and cost of claim will determine how much you pay. Other Volvo S80 drivers in the past have had more accidents and more costly accidents than Laguna drivers. This is what they base the price on. If statistics had shown Volvos having less accidents, it would be cheaper.

This is a bit of a generalisation as they take into account many things like age, gender, age of car, model of car, location, engine size, car value, etc and run a statistical model to get a price but the basics are that you now appear in a riskier group than before based on past claims.