Excessive insurance charge for switching cars?

[ExTownie]

We are in the process of switching my OH's car, which is insured with esure. The old and new cars are a similar insurance group and the cost of a full year quote is similar for both. We require a 4 week overlap in order to sell the old one. To provide this switch and overlap with no extension of the policy, esure have asked us to pay about 90% of the full year premium again.

I appreciate that in general businesses can charge pretty much what they like, but given that we are to some extent captive, I wondered whether the Financial Ombudsman might consider this to be an unfair practice, rather like an excessive fee for going overdrawn? Excluding admin costs, I might expect the extra 4 weeks of insurance to cost about 8% of the annual premium, so 90% seems wildly excessive to me.

In practice we are not entirely captive, but have to insure the new car without no claims discount with a new insurer, since the NCD is still being applied to the old car. Perhaps esure are free to charge whatever they like, but it seems unreasonable to me. Any views?

[redsturgeon]

We are in the process of switching my OH's car, which is insured with esure. The old and new cars are a similar insurance group and the cost of a full year quote is similar for both. We require a 4 week overlap in order to sell the old one. To provide this switch and overlap with no extension of the policy, esure have asked us to pay about 90% of the full year premium again.

I appreciate that in general businesses can charge pretty much what they like, but given that we are to some extent captive, I wondered whether the Financial Ombudsman might consider this to be an unfair practice, rather like an excessive fee for going overdrawn? Excluding admin costs, I might expect the extra 4 weeks of insurance to cost about 8% of the annual premium, so 90% seems wildly excessive to me.

In practice we are not entirely captive, but have to insure the new car without no claims discount with a new insurer, since the NCD is still being applied to the old car. Perhaps esure are free to charge whatever they like, but it seems unreasonable to me. Any views?

How much is left to run on the insurance?

I'd be tempted to just buy new insurance for the new car for a year with a new provider, I'd assume that it would be cheaper. I would expect a new provider to honour your NCD surely it moves with you and is not attached to a particular car. Then when you sell the old car you can reclaim the unused portion of the old insurance.

Out of principle I would do the above, even if it cost me more which in the worst possible scenario would be perhaps 10% more.

John

[didds]

what John said.

if you need insurance on the "old" car for that month you mention you could look at short term insurance. Or simply a full year with no NCD on it, which you'll cash in after a month. Just do some investigating and sums.

Of course if you full year is wonderfully low anyway, then it could be that the above won't be any cheaper anyway, and why the additionally intermediate cover offered ends up being 90% etc .

what are the figures quoted?

didds

[ExTownie]

There is 5 months left on the insurance

Unfortunately no claims discount can only be applied to one car at a time, so I can only take a new policy with zero NCD while the original car is insured. In this situation it is usual for the existing insurer to offer overlap insurance for a month for a modest fee, and effectively apply the NCD to both. This is the semi-captive element that I think esure are exploiting.

I did get some short term insurance quotes and the fee for a month was similar to a normal full year policy for us. This is probably due to them basing short term cover on fairly high risk drivers - I think they just assume you have fewer than 9 points for example, and no more than 2 or 3 claims. We have no points and no claims, but that doesn't change the premium.

The cheapest route I have found is adding my OH's new car on to my insurance, turning it into a multi-car policy. Even with zero NCD this is a whole lot cheaper than the esure route. I can then add the NCD on to my multi-car policy when we sell the old car.

I do feel that esure are being unreasonable in their approach - but I wonder whether it crosses the line to be a matter for the Financial Ombudsman.

[didds]

I appreciate this is none of my business but why would you need to insure both the new and old cars?

rather than just declare SORN on the old one and cancel its policy?

I'm reading between the lines here and somewhat presuming that you aren't going to lose a year's addition to NCD by doing so.

didds

[ExTownie]

didds - We have just advertised the old car for sale. It could take a few weeks to sell and it needs to have insurance to be able to go out on the road for test drives. The car itself needs to be insured for that. We will probably use it a little as well - cars drive better if they haven't been left for a week or two.

[didds]

naturally its your call but TBH I'd leave the new car SORN and uninsured and drive the old one until sold. then on the time of the sale, tax and insure the new car.

caveat: I am somewhat presuming you have an off road area to keep the new car, and move it about to and fro a bit to move the tyres around. if you need to park both on the road then yep I can see you do need both insurances.

didds

[melonfool]

naturally its your call but TBH I'd leave the new car SORN and uninsured and drive the old one until sold. then on the time of the sale, tax and insure the new car.

caveat: I am somewhat presuming you have an off road area to keep the new car, and move it about to and fro a bit to move the tyres around. if you need to park both on the road then yep I can see you do need both insurances.

didds

Even on the drive surely it needs *some* insurance? Maybe not by law but what if something drove into it on your drive, or your house caught fire and the car was destroyed, or something fell on it, or all sorts of other unusual things that are exactly what insurance is for?

Mel

[didds]

fair points Mel.

I was only working on the legal requirements perspective.

This may be derailing the thread now but...

... when typically then would something on your property need insurance above and beyond home contents and buildings insurance? If instead of a car on the drive there was a pallet of delivered items that got damaged/burned down or whatever - would that - typically - not be covered by home insurances and require separate and specific insurance? I get that specific T&Cs will apply eventually, but as a general rule of thumb?



didds

[didds]

Can you even buy insurance for "parked on my drive and insured against accidents and other nasty things happening to IT, but it will never get driven anywhere so I don;t need cover for crashing onto somebody's Ferrarri or mum ie accidents happening to something/body else" ?

didds

[melonfool]

Can you even buy insurance for "parked on my drive and insured against accidents and other nasty things happening to IT, but it will never get driven anywhere so I don;t need cover for crashing onto somebody's Ferrarri or mum ie accidents happening to something/body else" ?

didds

Well, not that specific, no. But you can buy what is known as 'car insurance'.

Mel

[didds]

Well, not that specific, no. But you can buy what is known as 'car insurance'.

Mel

of course - hence this thread

But that would be complete overkill for the level of insurance and associated risks involved in these circumstances.

didds

[Gaggsy]

How much would esure refund you if you cancelled the policy with 5 months left to run? Might be worth asking. Then start again for both old and new cars - maybe on a multi-car policy.

This sounds like the sort of situation an insurance broker might be useful.

[melonfool]

Well, not that specific, no. But you can buy what is known as 'car insurance'.

Mel

of course - hence this thread

But that would be complete overkill for the level of insurance and associated risks involved in these circumstances.

didds

Would it? Really? My car insurance is £240pa, so for a month (the time taken to sell the second vehicle) that's £20. And that's fully comp. Seems perfectly reasonable to me.

I admit that 90% of £240 doesn't seem so reasonable. But I would definitely be happy to pay my usual premium pro rata even if the car was just on the driveway and even if they added an admin/cancellation charge.

I think for the OP - no, the ombudsman won't get involved in levels of charging. As previously suggested, take out a cheap 3rd party policy and cancel it when you sell the car.

Mel

[didds]

all I meant by that Mel is that "car insurance" covers the driver(s) for drivcing on the road and the associated risks of having an accident with another vehicle or person and property etc.

By not ever driving anywhere at all those risks disappear. So the premium to presumably cover them is redundant.

Thus In the interests of insuring a static item for damage to it only, full car insurance has to be more expensive to do so.


That said your £20 a month example is well made - but it seems the OP cannot get that basis ie a month at a time on a pro rata basis.

didds

[pochisoldi]

Can you even buy insurance for "parked on my drive and insured against accidents and other nasty things happening to IT, but it will never get driven anywhere so I don;t need cover for crashing onto somebody's Ferrarri or mum ie accidents happening to something/body else" ?

didds

Yes you can - it's called "laid up cover".

Google for "laid-up car insurance" or "laid-up cover"

PochiSoldi

[quelquod]

Can you even buy insurance for "parked on my drive and insured against accidents and other nasty things happening to IT

Yes, more or less though you might need to go through a broker.
I used to have it for my prized old Austin which only went out in summer months. I still have the equivalent (ground-based cover) for my glider which I don't fly in the winter.
It's perhaps out of the normal run and not a hugely competitive market but you can insure against most events.

[staffordian]

Can you even buy insurance for "parked on my drive and insured against accidents and other nasty things happening to IT, but it will never get driven anywhere so I don;t need cover for crashing onto somebody's Ferrarri or mum ie accidents happening to something/body else" ?

didds

Yes you can - it's called "laid up cover".

Google for "laid-up car insurance" or "laid-up cover"

PochiSoldi

When I worked in insurance several decades ago, it was generally known as fire and theft cover, ie one step down from TPF&T, which seems to have died a death these days.

Staffordian

[ExTownie]

Probably because I had raised this as an official complaint with esure, ahead of referring to the Financial Ombudsman, esure have agreed to cancel my policy on request and refund it pro rata, with no deductions.

I am not happy that they attempted to abuse my semi-captive position, as I saw it, but this at least removes any captive aspect, so if I had a valid complaint before, I probably don't any more.

I accept that with fairly low margins in the competitive insurance market, it is understandable that they want to impose admin charges when changes are made. Had they simply quoted the appropriate insurance cost (about 8% of my annual policy) and then charged a £25 fee, I would have accepted. What I wont accept is charges which are completely out of proportion.

I'm not sure if it is still the case, but my understanding was that companies had a significant cost each time a referral was made to the Financial Ombudsman. If that is correct, this is perhaps a way of levelling the playing field - either be reasonable with your customers or be 'fined'...