Car Insurance Hell!

[BLC]

Originally Posted by tehBoris

Why would you have to declare the canceled policy? If the terms of any new insurance do not include any clauses stating that you must provide information about a canceled policy, you don't have to declare it.

Originally Posted by sicone

Not sure where they are getting the idea that you have to inform insurance companies that you've had a policy cancelled. I know 2 people that work for insurance companies and they only need to know if you have been refused insurance - this is not the same as having a policy cancelled.

I'm not too sure for car insurance, but it works this way with home insurance. Effectively they adhere to the same principles, but may be implemented slightly differently. I might be a bit late to this party, but never mind...

Insurers - car and home - use a common database called CUE: Claims Underwriting Exchange (I believe...?). Any policies and claims you have ever had are registered on CUE, and the CUE database is searchable by all insurers (or at least the ones that have signed up to it). When you take out a new policy, a CUE search is usually run. Therefore if they find a voided policy - or x number of claims in y years - they have further evidence to decide whether to insure you or not. What it effectively means is that they don't necessarily have to take your word for it; if you don't declare a previous policy, they can still check up on you. This is why their automated messages or disclaimers usually say that insurers exchange information.

Which leads me on to my next point... It comes down to how the policy is cancelled and usually there's two types of cancellation: cancelled or lapsed, which means that you have either terminated the contract with them or they have terminated it due to non-payment (different insurers view lapsed policies differently); the other type of cancellation is a voided policy. A voided policy is where an insurer is refusing to provide cover due to non-compliance with their terms; whether that's non-disclosure of material facts (such as not telling them that you have prior convictions) or whether you have not provided the requested evidence.

It seems that in this case they have voided your policy because they do not think that you have complied with the T's&C's. If this is the case then it might impact your ability to obtain insurance in the future, so you really do need to try and resolve this with them. With Home insurance, if you've ever had a policy voided you're pretty much S.O.L. in getting any home insurance ever again - especially if it's void ab initio (back to the start of cover - effectively meaning that the insurer never provided any cover). You'd have to go to specialist brokers who would charge you a fortune. I've had to void policies ab initio before now and it's not an easy decision to make.

Next time you speak to them, ask for their complaints/escalation procedure. Write out a letter detailing all points of contact you have had with them, the names of anyone you have spoken to, when you sent in the evidence requested (dates & times preferably, which should be easy if you've done this over email), the date you took out the cover, the summary of any discussions you have had and detail what you want as a satisfactory outcome of the complaint. Make sure that you explicitly state that, whatever the outcome, this should not affect your ability to get insurance in the future. Print out a copy of any emails you have sent and attach these as supporting evidence. Send the whole lot to their complaints people via recorded/signed for post. I know this is a lot of information, but it will help speed the complaint and give you a solid body of evidence.

From what I've read, you should easily be able to demonstrate that you have complied with their terms/procedures. There should be no reason that the policy cannot be re-instated or terminated by you - at no detriment to you taking out future policies. Only if you can't resolve the situation with the insurer should you take your case to the FOS (Financial Ombudsman Service), or even threaten FOS involvement. The FOS will tell you the same thing as their complaints people: the insurer has to be given the chance to resolve the complaint to the satisfaction of both parties before it can be escalated to them.

EDIT: Forgot to mention, there's also no reason why you should have to pay anything extra to get the policy re-instated or cancelled.

God I hate being an insurance nerd....!