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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 14708
Experience:  I have been practising for 30 years.
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I paid my motor home insurance in full on my camper van in

Customer Question

I paid my motor home insurance in full on my camper van in May. Due to unforeseen circumstances I sold the van on 26th September 2019. I cancelled the policy as I was not sure if I would replace it or if I would continue to own a vehicle. I asked for a refund on the remainder of the policy. I was informed that the police had been informed that the policy was cancelled and I was not entitled to a refund under Section 147 of the Road Traffic Act 1988. As I have found it difficult to follow my interests without transport I asked if the remainder of the premium could be put towards the Insurance of a small car. I have been informed that the policy is cancelled so that is not possible that I am not entitled to a refund as the policy booklet says there will be no refund if the policy is cancelled in mid term. If I would like to get a quote from them for the Insurance of the car the underwriters may give me a credit note. I do not recall getting a policy book and I feel that by paying for Insurance up front I am at a disadvantage.
JA: Where are you? It matters because laws vary by location.
Customer: I live at Strensall near York
JA: What steps have you taken so far?
Customer: Since recieving their email yesterday i have been thinking about it but am not sure hoe to proceed
JA: Anything else you want the Lawyer to know before I connect you?
Customer: Not that I am aware of
Submitted: 4 months ago.
Category: Law
Expert:  F E Smith replied 4 months ago.

Good morning. I will assist with your question - be aware this is an email not chat service therefore i maybe delayed in replying.

who were the insurers?

how did you buy this insurance - online/phone?

what did you expect to receive from your cancelled policy?

Customer: replied 4 months ago.
I used Adrian Flux as they insure older vehicles and they selected Trinity Lane Insurance Company Ltd as suitable
I applied for the quote by phone but they required a lot of documentation which was sent by email and correspondence.
As I had paid in full I expected to get a refund as I had not made any claims or owed them any money.
Since then I have checked various sites that say you have the right to cancel a policy but the Insurers usually
deduct 2 months of the premium to cover administration costs. As my policy had 7 months to run I would expect a refund of 5 months
Expert:  F E Smith replied 4 months ago.

Can I not altogether certain what section 147 has to do with you getting a refund. Being quite frank with you, if you cancel a policy after 5 months, you are going to get very little refund for the unexpired period and it is generally a waste of time cancelling it.

Further, the policy is cancelled, it’s cancelled and if you got another vehicle then you would be starting from scratch.

The movement of money on the other hand is something completely different and of the was a small amount of premium to come back from the original policy, then the insurance company can either refund that to you or leave it on account just in case you get another car at some stage in the future.

You may feel that you have been disadvantaged for paying the insurance upfront but that isn’t the case. It has been like this for years. Motor insurance is not a monthly policy, which is paid monthly, it is an annual policy paid annually. HOWEVER some insurance companies will allow you to pay the annual premium monthly. In your particular case, if you cancel the policy after the fifth month you would still owe the balance of the premium less a tiny refund (if any).

Everything that you have told me, to be honest, is quite normal and anyone who has had insurance over the years will be aware that cancelling it mid-term gives very little back.

I am familiar with Adrian flux because I have my own campervan insured with the company and I have used that company for classic vehicles over a number of years. I have always found them to be quite fair with good admin.

I don’t know who has told you that the insurers usually deduct two months premium to cover admin: in my experience, if you cancel a policy at any time during the term, particularly almost halfway, the chance of you getting a meaningful amount of money back is remote.

You don’t need to take my word for it, but you can’t beat the insurance company with a stick and your only remedy, if you don’t want to go to court, is to make a complaint in writing to the Financial Ombudsman Service.

I’m sorry, I imagine this is not the answer you wanted.

Can I clarify anything else for you?

I am happy to answer any specific points arising from this.

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Thank you.

If you still need any points clarifying, I will still reply because the thread does not close.

Best wishes.