In recent weeks, our family moved to a larger home, within the same small village and just two minutes from our previous two bedroom apartment.
We have undertaken all the usual things you do when moving including mail redirection, electoral roll registration, renewing driving licences, adjusting insurance policies.
However, I discovered that my insurer would no longer offer cover. They stated my policy would be cancelled with zero refund and four months to go on the term.
It seems quite incredible that I must now declare, when applying for new cover, that my car insurance was previously cancelled. What can I do?
One motorist had his insurance cancelled after moving home – with no explanation given
Grace Gausden, This is Money, replies: There are many reasons why an insurer decides to cancel, refuse or void your car insurance policy.
Common reasons include non-payment, non-disclosure and fraud.
In this instance, we decided not to name the insurer.
However, you are still not sure why your policy was cancelled as your husband’s was changed with minimum fuss.
You suspect it may be that crime rates are slightly higher in your new area but it shouldn’t be a marked change as you moved only a couple of minutes away from your old property.
Not only are you now questioning how the insurance industry can penalise those who, through no fault of their own, find themselves in this situation but also worrying that this means you will be punished moving forward for having a policy cancelled.
As you say, this is a different situation to a policy being cancelled due to a serious infraction.
Insurance cancellation is something drivers have to declare with every new insurance provider.
Unfortunately, this often serves as a red flag and as a result, you may find premiums are much higher or that mainstream insurance suppliers may not want to cover you at all.
This is Money asked insurers what drivers in your situation can do as you feel it is unfair you are made to suffer despite not doing anything wrong.
Many said without knowing the exact circumstances it would be difficult to comment but did offer advice whilst others said what their policy is on premiums being cancelled without warning.
A spokesperson for Admiral said: ‘All insurance companies will have their own underwriting criteria and decide what risks they are willing to provide cover for.
‘If the customer’s last insurer cancelled his policy because they couldn’t offer cover for the new address, then we wouldn’t expect a customer to declare this.
‘If this was the case, then the policy was cancelled due to the underwriting conditions set by the insurance company.
‘There are some occasions when we would require a customer to declare why they’ve had insurance cancelled, for example if it was cancelled due to non-payment or a breach of the terms of the policy.’
Each insurer has their own underwriting criteria which could leave customers with no cover
A spokesperson for Direct Line replied: ‘We review every policy on an individual basis and if a customer’s circumstances change, then we encourage them to contact us as soon as possible to ensure that their policy is reflective of both their needs and their correct information.
‘There are a number of rating factors that are considered when offering a policy to a customer, which is why it is important that a customer makes us aware of any changes as soon as they are aware of them.
‘It’s important that the customer checks with their insurer as to the reasons why the policy was cancelled and whether this is going to affect them with future quotes. Although in some cases, should a customer’s policy get cancelled then this would need to be notified.’
Meanwhile, Compare the Market said you will need to disclose the policy cancellation within the relevant question in most insurance question sets.
It added many insurers would likely not provide a quote, and those who do may charge a higher price.
If you think your car insurance was cancelled wrongly or unfairly, you can make a complaint to the insurer – or at the least gain a final reason for cancellation ahead of doing that.
Ryan Fulthorpe, of GoCompare car insurance, said: ‘Insurers take in many factors when deciding whether they can insure a driver and address is a major part of that.
‘Some insurers may not want to cover certain postcodes at all, and that’s when some drivers can come up against issues.
‘By law you have to update a change of address with the DVLA or you could be liable for a £1,000 fine, while not updating your address with your car insurer could invalidate your insurance so it is very important to always give accurate information to your insurer and the DVLA.
‘But doing so could mean an increase or a drop in the cost of your car insurance, or in this reader’s case, a rejection of the policy.
‘Different insurers look at the risk factors of car insurance in a different way, so it’s important to shop around for your car insurance to ensure best policy and best price – even when you move house.
‘Drivers must always take reasonable care to disclose all relevant information when applying for insurance, otherwise this could lead to a declined claim or a cancelled policy.’
A spokesperson for Aviva added: ‘We consider a wide range of risk factors when calculating motor insurance premiums, including the driving experience of the customer, the usage of the vehicle and the address at which the vehicle is kept or where it is usually parked when not in use – for example, in a garage, on a driveway or on the road outside the property.
‘The latter point allows us to assess the likelihood of incidents such as theft or malicious damage when the vehicle is not in use.
‘If a customer moves house, the level of risk associated with the vehicle may change.
‘This could mean that the motor premium may fall or rise in line with this altered risk, or in a very small number of cases, we may no longer be able to offer cover at a new address.
‘In this scenario, we would continue cover until the date of the move, but we would inform the customer that we would no longer be able to insure the vehicle after the move has taken place.’
Where drivers park their car & which area they live in can depend on whether they get insured
A spokesperson for Hastings Direct said: ‘The stance on what constitutes a cancelled policy for declaration purposes will vary by insurance provider.
‘In this particular example, Hastings Direct would not deem cancellation of a customer’s previous insurance due to the insurer not covering a new address as a declarable reason of cancellation.
‘Generally speaking, insurers are more concerned with situations where customers have had insurance cancelled due to fraud or not adhering to policy terms.
‘As such, individual assessment so that they can consider the circumstances behind the cancellation is key to an insurance provider making an informed and fair decision on whether to provide cover.’
Grace Gausden, This is Money, adds: For drivers who believe their policy has been cancelled unfairly, they can complain to their insurer and set out their reasons why.
If you don’t reach a satisfactory resolution, you can always take your case to the Financial Ombudsman who will review the evidence and make a judgment.
This content was originally published here.