You scrimp and save to pay for your car insurance but at last it"s done so you sit back and think OK, no more to pay out for another year. Then after a few months you change your car (why not, most people change theirs every three years), you have a bump, change your job, moved to a new address, or any one of dozens of circumstances that you need to tell your insurer about, otherwise they could nullify your insurance.
You ring them up (always assuming that the company you chose actually has a telephone line, and that there is a real human to answer it) let them know your change of circumstances and two weeks later a bill arrives for £120. "They can't do that!" you cry. Oh yes they can, and often do. It"s all written down in the terms and conditions. You DID read the terms and conditions before buying the policy, didn't you?
Can they really do this? Yes they can!
Insurers will remind you at every opportunity that you have an obligation to inform them of any changes to your circumstances that could affect future premiums. With many companies this is just a mere formality, you contact them, they change the records and that is the end of it. Others will charge you a reasonable fee, and the sharks will charge you an extortionate fee. They get away with it because it has been estimated that somewhere in the region of 85% of motorists who buy car insurance online never bother to read any of the documentation whatsoever, so they really haven"t got a clue what they are letting themselves in for.
We've seen people be charged over £100 just to change an address or job description.
How that cheap price can suddenly increase
Or, here is another all too common scenario that causes a lot of very angry complaints. You state on your proposal form that you are entitled to 5 years no claims discount, the insurer takes your word for this, accepts the premium and issues the policy. A few days later later you get a letter demanding that you send proof of your no claims discount within, say, two weeks, otherwise your policy will be cancelled with horrendous cancellation charges. You either fail to send this (you may be on holiday, in hospital, or be unable to do this for any other reason) and the cancellation threat becomes reality, or you discover to your horror that you are only entitled to 4 1/2 years NCD and a demand come straight back for a huge increase in premium, making what seemed to be a cheap policy into a very expensive one indeed. You either pay up or find yourself uninsured and with huge fees deducted from the premium you have already paid.
Beware of foreign insurers
We have looked at a lot of policies over the years and the impression we have got is that many of the biggest culprits for these particular stunts are at the cheaper end of the market – no surprise there, these guys still have to make a profit even if they are charging less for their policies – but also a disproportionate number of them are based outside of the UK in jurisdictions such as Gibraltar.
This may have something to do with the fact that although foreign insurers have to obey many of the same rules and regulations that British companies are subject to, they do not necessarily come under the jurisdiction of the Insurance Ombudsman, someone who you can normally refer a complaint to if you are not satisfied that an insurer has treated you fairly. This could mean that as a last resort you would have to take a complaint against a foreign company to court – and have you ever tried to sue someone based in Gibraltar?
Don"t pay before reading this!
The moral is; by all means buy the cheapest car insurance you can get, if that is what you want to do. However, before signing up and paying your premium at least read through all the documentation (legally it has to be available to you easily, and be written in everyday language rather than legalese) and make sure that you are completely happy with all the terms and conditions. Then if you are hit with a huge fee for changing some trivial details you will at least have seen it coming.