Since my car was written off recently and I received settlement cheque from my insurer, I thought I need to take a new insurance for my new car. My understanding was that insurance is automatically void after final settlement amount is paid off.
Surprisingly when I called my insurer, they said my insurance will still continue till end date and I can simply add my new car as a change of car in the existing policy.
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Handy for NCB continuity, althougn I suppose you are running down the policy without any other benefit while you remain without a car.
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I think this depends on the insurer. Some are better about keeping a policy open than others. It also might depend on whether you paid up front or pay monthly.
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As Teabelly says, it depends on insurer. I was with Bell Direct (part of Admiral), and had a write off in the first month of a 12 month policy. They cancelled the remaining 11 months of the policy. I had paid annually but if I had paid monthly they would have knocked the remaining payments from my payout.
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I am with Aviva (formerly Norwich Union) & I paid annually. They even said I can temporarily suspend my policy as I have no car at moment.
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From what I've seen it is Admiral and their related companies that are the cancellation types. All owned by RBS I think....
With continuous insurance requirements imminent this kind of behaviour could cost customers dearly.
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A lot of folks are shocked* that in an at-fault write off, they have to pay the rest of the policy term.
* I know this because i hear the stories from my GF who works with RBS insurance (direct line, churchill, tesco etc.)
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I have yet to own a car for a full year so I have to do this quiet often. What Directline do is still charge you per month but then refund it when you get the new car. So if you're paying £80 a month on a suspended policy they will reduce reduce the monthly payments until they have paid you back.
Sometimes you need to be careful with the cheapest insurance companies because they often con you with things like this. Directline is not the cheapest and they have made mistakes but they are very flexible and have never charged me for ammendments even they they say they will.
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Paying the year isn't the problem. Being asked to finish the term and have to pay out for new insurance is unfair. You pay for 12 months insurance. 12 months is what you should get. If you have only done a few months then there is no way you should have to pay the other months unless the policy is allowed to continue. Anyone that has paid in full upfront should also get the full year. Insurance companies need to understand what reasonable people expect when they take out a policy. Admiral/RBS are notorious for trying to weasle out of claims and making derisory offers so this kind of behaviour isn't surprising. It's why I wouldn't touch them with a 20 foot pole and that is without ever having a fault claim in my entire driving history.
I think the OFT/FSA should be looking into this.
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Insurance continues after car written off - Iffy
