First year stitch

I recently changed my car and the dealer set me up with a very good insurance quotation for the new car. When I contacted my current insurer to enquire about cancellation (3 months remaining), as well as a cancellation charge of £15, I would have to repay in full a windscreen damage claim of £230 that I made last year. Surely this is unlawful? Their argument is that as I had broken the contract (of 1 years insurance) I have to repay all claims. I am aware of a similar situation with some personal liability insurers where you have to continue paying insurance for 3 years after ending your work or they will not pay claims arising within that 3-year period. I would appreciate if you could clarify the situation, and your comments

Asked on 25 April 2009 by

Answered by Honest John

That's what can happen if you switch insurance every year. First year policies are very restricted. Had you made a major claim, the policy could have been cancelled after the payout and you would have had to start again. With some policies there is no refund at all if you cancel within the first year. This is one good reason for sticking with the same insurer even if it doesn’t offer you the lowest quote.

Tags: insurance small print owning policies

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