Policy Shop cancelled my home insurance!

[unclebulgaria67]

I agree it was my fault it seems totally. I can totally understand that they based the insurance on my answers and its my mess to sort out. If it costs me an admin fee then fair enough.

 

What I disagree with is the way that cancellations are thrown out in cases like this. Why not contact me and say, we think you made a mistake, please contact us to sort this out asap or we'll have to cancel. Like I said, policy turned up one day, cancellation the next.

 

Having an insurance cancellation on record is a BIG deal. Get arrested for drink driving and its off your record in time, get an insurance cancellation because you made a mistake on the form and its with you forever. I did a quick check and re-quote with a cancellation on record. £80 a year extra for house insurance, £200 for car insurance. Over 10 years thats almost £3000 in extra insurance costs because of my mistake.

 

My issue is that the the consequences are not proportional. After doing some research, I've heard of people who have had letters saying sorry cancelled because you've had two claims this year, one person even had a letter saying sorry cancelled reason=other. Its not on.

 

I looked at FOS and I suspect they agree with me. Gone are the days where insurance companies get to turn down life insurance claims because you forgot to tell you went to the GP about a cough 10 years ago. The FOS take the view that where an innocent accidental mistake has been made then the insurance companies need to be proportional in their view on this.

 

IMHO, putting a marker on record which will cost you £1000s in extra costs for the rest of your life because of an oversight is not proportional.

 

I don't believe any marker would have been put on official records, but it is better for you to cancel because of the error.

 

The FOS are not very consistent on the issue of disclosure. If you read their site on this, it looks at whether it was deliberate or not. Even then, if an Insurers can demonstrate that they would not have an Insured someone because of non disclosure, the Insurers could void the policy and not deal with the claim. I am not sure that the FOS would insist on the Insurers keeping the policy alive and dealing with the claim. I would not want people to get into this position of having some long drawn out dispute.

 

The UK Insurance industry has gone down hill in the last 10 years or so. It has taken on much more of an American approach and they tend to be much stricter on how they deal with issues. The amount of litigation that goes on in the US regarding Insurance disputes is huge. I suspect that it is on the increase here.

[paulfoel]

I don't believe any marker would have been put on official records, but it is better for you to cancel because of the error.

 

The FOS are not very consistent on the issue of disclosure. If you read their site on this, it looks at whether it was deliberate or not. Even then, if an Insurers can demonstrate that they would not have an Insured someone because of non disclosure, the Insurers could void the policy and not deal with the claim. I am not sure that the FOS would insist on the Insurers keeping the policy alive and dealing with the claim. I would not want people to get into this position of having some long drawn out dispute.

 

The UK Insurance industry has gone down hill in the last 10 years or so. It has taken on much more of an American approach and they tend to be much stricter on how they deal with issues. The amount of litigation that goes on in the US regarding Insurance disputes is huge. I suspect that it is on the increase here.

 

Maybe no marker but you do have to declare it. I have looked at FOS site and see that whether its deliberate does make a difference. This is fair enough - if you are fraudulently doing something then you deserve all you get.

 

But I agree. For instance, in my case, the insurer just would not have insured if they'd been aware of the claims. If it a was a case of increased premium then its easier to sort. Again, in my case, the only resolution was for them to allow me to cancel.

 

Perhaps the way forward is that both parties should be given some time where mistakes can be sorted. Again talking about the accidental mistakes here.

 

For instance,

 

- Insurer contacts insured and advises they think you've missed out some claims - please contact us within 7 days or we'll have to cancel.

- Insured then contacts insurer and squares it all off. Insurer then has the option to advise insured of extra premium or (as in my case) advised insured that they cant cover.

- If they cant cover then, as in my case, insured cancels policy, pays for time on cover maybe and both parties go their separate ways. Insured ensures they dont make the mistake again and gets cover from alternative insurer.

[Mwynci]

Good result.

[dacouc]

The issue is the underwriter does not accept customers with claims, so as a customer they would not have quoted had you declared the claims so for them the only option is to cancel the policy as soon as they discover the mistake.

 

If they had been an Insurer that accepts customers with claims there's a good chance they would have written for you for an explanation and assessed whether or not they would have continued cover and if so whether any amendments to the premium and / or cover where appropriate.

 

In some ways they did you a favour by discovering the issue early in the policy and withdrawing cover, if they had acted as most Insurers do they would have checked your claims history when you make a claim with them. Had this been done, as an Insurer who does not cover customers with claims they would have voided your policy from inception (Probably) refunded your premium and refused to deal with the claim.

 

The Consumer Insurance Act has superseded most of the ruling and advice you've been reading on the Ombudsman's website about non declaring, it offers more protection for the consumer from non disclosure but allows the Insurer to void policies and refuse claims where they would not have offered cover to the customer had they been aware of the non disclosed information at the start of the policy.

 

Whilst the CI Act provides more protection for consumer and means most honest non disclosures do not affect a claim (See paragraph above) it also means many Insurers are now more checking information at inception of policies so they can ensure the cost of non disclosure is not spread amongst their customers who do declare and ultimately save the Insurer money as well.

 

I don't believe the Ombudsman would have done much in your case apart from possibly awarding you some compensation of circa £50 to £100 for the inconvenience of them miss informing you about the exact time of cancellation.

 

To be blunt you also need to see that to an Insurer it's pretty black and white, they expect customers to declare the correct information, if the customer does not declare the correct information they don't really want the customer as they worry about other things that have not been declared, customers not declaring the correct information costs them money as they carry the risk of a claim for that customer but have not collected a premium that reflects the overall risk and their data shows customer who do not declare information correctly are more likely to have subsequent claims, the same is true of people who who have previous claims over customers who are claim free.

 

Anyway congratulations you got a good result which most people would not have the persistence to achieve