My motorbike was written off in a no-fault claim - should I receive a refund for the remainder of my policy?

My motorcycle has been written off in a no-fault claim, halfway through my policy. I have eventually been paid out for the value of the bike. I phoned my insurer to cancel the policy as the vehicle has been scrapped, but was told that because of the company's cancellation fee, and that I had held it for six months, I would receive no refund. I have argued that this is a tangible loss. I've calculated that because of the annual premium, and the amount of time left to run on the policy, I have essentially paid, and been unable to use cover amounting to approximately £130. My insurer stated that this was not possible through them, and that I would have to contact the underwriter (who have been dealing with the claim). I have done so, but the underwriter has simply said that they will forward my evidence to the third party to see what their response is. They say they don't want to give me any 'false promises' of being able to recover this loss. Is it reasonable for me to ask for this? Is this something I could take to the Ombudsman?

Asked on 25 January 2018 by Jayjay James

Answered by Tim Kelly
It depends how you claimed. If you claimed directly through your insurer, then the contract has been fulfilled and you are due nothing back. Some insurers will let the policy continue for the remaining time, and some may refund if liability is not in dispute. The insurer should allow you to cancel the policy from that date and refund you. They are allowed to charge a cancellation fee, this should be a "reasonable amount" and generally no more than £30-£40. You can then claim this back from the at fault insurer. Underwriters do not handle claims, they underwrite the risk of the policy, so something is off here. If you have legal expense cover, use that. And yes, you can take it up with the Financial Ombudsman Service.
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