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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 69772
Experience:  Over 5 years in practice
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Dear Experts; A question regarding the legality (or

Resolved Question:

Dear Experts; A question regarding the legality (or otherwise!) of the conduct of my Motorcycle Insurers...
I returned home from a foreign holiday just over a week ago to find a letter on my doormat from my motorcycle insurers, stating that 'following the recent amendment to your policy there is an outstanding balance of £61.84p on your account'. It demanded payment within seven days and threatened 'a reduction in the cover or cancellation of the policy with immediate effect and without further notice'. (Reason: My new insurers had just received confirmation of my no-claims-bonus from my previous insurers, which turned out to be 4 years rather than the 5 which I initially claimed, mistakenly. Therefore my premium had gone up).
However, since five of the allotted seven days had already passed, and as I was stone-broke after my holiday, I was unable to make that payment in the two-day-window remaining, and sure enough in due course I received a second letter telling me that my policy was now cancelled. Just like that! What's more, they are demanding a payment of £22.96p which according to their calculations is an outstanding balance and which I owe them simply to close the account. (This figure was arrived at, they have since explained to me over the telephone, because the cancellation fee plus this £61.84p actually exceeds the refund on the 12-month insurance premium which I paid them, in full, just 6 weeks previously!).
I feel that this is hugely irresponsible behaviour by the Insurers. Just think about it... what if I had been away on a two-week-long riding holiday when that first letter was sent to my home address..? If that had been the case, I never would have read that letter in time, and at some point during that holiday I would have found myself riding around uninsured, and completely unaware of the fact!
So my first question is; Is there not some 'escalation' procedure which Insurance companies must adhere to in situations such as this, to ensure that the customer is given FAIR AND REASONABLE OPPORTUNITY to square things up WITHOUT having their Insurance snatched out from under them..?
Secondly, this just in case you tell me that the insurers HAVE followed the correct procedure in this matter; Can they really expect me to pay them the £61.84p now - at this stage in the proceedings - having cancelled the policy due to non-payment of that very amount..? Surely by cancelling the policy they have forfeited any claim to that particular money?
Hoping you can help, and thanking you a million thankyous for your time
Sincerely
Richard Mcgreary
Submitted: 10 months ago.
Category: Law
Expert:  Jo C. replied 10 months ago.
I'm really sorry but I cannot give you good news.
Expert:  Jo C. replied 10 months ago.
They are entitled to their money and they don't actually have to even give you 7 days to pay. Obviously your circumstances are not their problem I'm afraid.
Expert:  Jo C. replied 10 months ago.
It is generally good practice of them to write to people warning them of cancellation as otherwise would lead to driving without insurance but they have done that here.
Expert:  Jo C. replied 10 months ago.
In terms of cancellation, they are entitled to a sum of money.An insurance policy is a contract for a year. All of the money is due immediately. It is not an ongoing monthly contract which can be cancelled. They will usually allow people to pay in instalments because it fits better with monthly income but they don't have to.If you cancel mid term, the full amount is due.
Expert:  Jo C. replied 10 months ago.
Similarly, if you commit a repudiatory breach mid term the full amount is due.
Expert:  Jo C. replied 10 months ago.
Non payment of the extra amount is a repudiatory breach.In fairness, there was a relevant non disclosure so they would be perfectly entitled to cancel insurance entirely. They have chosen to ask for the increased premium instead.Im very sorry but I have to give you truthful information.Can I clarify anything for you?Jo
Customer: replied 10 months ago.
what about the £61.84? If they are no longer insuring me what does it matter wether I have 5 years no claims or 4 years no claims? They cut their losses when they cancelled the policy, no..?
Expert:  Jo C. replied 10 months ago.
No, they are entitled to the full price of the policy.
Expert:  Jo C. replied 10 months ago.
An insurance policy is a contract for a year. All of the money is due immediately. It is not an ongoing monthly contract which can be cancelled. They will usually allow people to pay in instalments because it fits better with monthly income but they don't have to.
Jo C., Barrister
Category: Law
Satisfied Customers: 69772
Experience: Over 5 years in practice
Jo C. and other Law Specialists are ready to help you
Customer: replied 10 months ago.
Thankyou Jo. Now go and get some sleep! ;-)
Goodnight
Expert:  Jo C. replied 10 months ago.
No problem and all the best. Remember that I am always available to help with your questions. Even if I am in Court I will usually pick up a question within 12 hours. For future information, please start your question with ‘For Jomo1972’.

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