IS THIS A LEGAL CRIME OR HOAX VEHICLE INSURANCE

[Nicetoseeyoutoseeyounice]

I sold my motor bike to my friend in September, told dvla and received back confirmation from them. A family member just happened to mention, and nothing to do with my bike, that when they sold their car they were quite pleased to get a bit of a refund back from the insurers, that got me thinking, I hadn't cancelled my bike insurance, I must tell them as I would surely get a part refund as the policy had only been running since May, so 4 months.
I rang them a few weeks ago explaining this and that I had the document from dvla if they needed proof of the sale.
To my astonishment they said I was due a tiny refund but as it costs £50 to cancel a policy I therefore owed THEM £42.
This has totally baffled me.
The next day they even phoned my home to repeat was I was told the day before.
Then, the following day, I received a letter sent by Recorded Delivery saying I had to send them proof of sale, which I will, and that if I didn't then under Sec 147 I would prosecuted.
Please can anyone help, or has this happened to anyone else.
I am at my wits end and NEVER owed anyone anything in all my life.

 

[Newboy]

I'm not by any means an expert on vehicle insurance but I suspect that the insurer needs you to confirm that the insurance is no longer needed.

The wording below is extracted from the Road Traffic Act and the first paragraph seems to refer to your insurers demand



(4)

Where a certificate has been delivered under this section [F2, otherwise than as described in subsection (1A)(a) or (b) above,] and the policy or security to which it relates is cancelled by mutual consent or by virtue of any provision in the policy or security, the person to whom the certificate was delivered must, within seven days from the taking effect of the cancellation—
.

(a)

surrender the certificate to the person by whom the policy was issued or the security was given, or
.

(b)

if the certificate has been lost or destroyed, make a statutory declaration to that effect.
.

[F3(4A)

Where subsection (4) above applies in respect of a certificate of insurance that has not been lost or destroyed, the person to whom the certificate was delivered—
.

(a)

may, instead of surrendering the certificate under subsection (4)(a) above, transmit to the insurer, by means of an electronic communication to an electronic address specified by the insurer, a statement confirming that the policy to which the certificate relates has ceased to have effect, and
.

(b)

if he does so, is to be treated as having surrendered the certificate.
.

(4B)

Where subsection (4) above applies in respect of a certificate of insurance that has been lost or destroyed, the person to whom the certificate was delivered—
.

(a)

may, instead of making a statutory declaration as described in subsection (4)(b) above, transmit to the insurer, by means of an electronic communication to an electronic address specified by the insurer, a statement confirming that the certificate has been lost or (as applicable) destroyed, and
.

(b)

if he does so, is to be treated as having made a statutory declaration as described in subsection (4)(b) above.
.

(4C)

Subsection (4D) below applies where—
.

(a)

a certificate of insurance is treated, by virtue of subsection (1A) above, as having been delivered to a person under this section, and
.

(b)

the policy to which it relates is cancelled by mutual consent or by virtue of any provision in the policy.
.

(4D)

The person must, within seven days from the taking effect of the cancellation, either—
.

(a)

transmit to the insurer, by means of an electronic communication to an electronic address specified by the insurer, a statement confirming that the policy to which the certificate relates has ceased to have effect, or
.

(b)

deliver to the insurer a legible printed copy of the certificate endorsed with a statement made and signed by him to that effect.
.

(4E)

A person who transmits a statement or delivers a copy of a certificate as described in paragraph (a) or (b) of subsection (4D) above is to be treated as having surrendered the certificate in question.
.

(4F)

In this section, “electronic communication” has the meaning given in the Electronic Communications Act 2000.]
.

(5)

A person who fails to comply with subsection (4) [F4or (4D)] above is guilty of an offence.

 

[EddieM]

Read the t & c's of your policy.

 

[Newboy]

If I were you (and the if cancellation charge is correct) I'd simply let the policy run to it's expiry date and then not renew

 

[Nicetoseeyoutoseeyounice]

thanks for your speedy replies, to newboy, I had already checked this, and I WILL be sending them the proof, but I cannot believe that just because I didnt send them a piece of paper I could effectively become a criminal and be 'guilty of an offence'. Also I am now sorry I did ring them, I could have done as you say and simply let the policy run out.
to EddieM, I have read the terms and conditions but only just, yes there is a mention of a £50 cancellation fee and they ask that you send them your Certificate of Insurance, but, there is no mention of being guilty of an offence if I dont, it says I must let them know verbally or in writing.
If I do have to pay all this money for a vehicle I no longer have and insurance which I no longer have do they not have justify this cost.
This really is unbelievable, I have no vehicle and therefore do not require insurance, BUT, I have to pay them £42.
can someone expand on this, I am absolutely gob smacked.

 

[nickso]

Be careful here.

By selling a vehicle and not cancelling the insurance you could be liable for any uninsured costs in the future if the vehicle is in an accident.

A local bloke sold his bike but did not cancel his insurance, the unlicensed and uninsured buyer then managed to kill himself on it and incurred damages to other vehicles. His insurer had to pay out for the damages and then sued the seller for the total costs which ran up to near 20k if I remember correctly. He also had the policy cancelled by the insurer which makes it a major ballache to get insurance in the future.

My advice....pay up and put it down to a life lesson. If they will not waive the fee make it absolutely clear you and your family/friends will not use them and the underwriter ever again.

 

[Nicetoseeyoutoseeyounice]

Thanks nickso, I fully understand what you mean, and I can positively confirm that the buyer HAS insured the bike.
I have just been looking around on the internet and it seems this is happening with others and with the same firm, dont know if I can name them on here....people are taking it to the ombudsman and getting refunded.
I realise the offence thing and as I said I WILL be sending the insurers my Insurance Certificate as they have requested but I really dont understand this fee.

 

[cajar]

They seem to be implying that the offence is having a policy on a bike you dont own, therefore cough up the cancellation fee. However this is not the case.

The "offense", would be "cancelling an insurance policy and keeping the certificate pretending to be insured"

Since you haven't cancelled the policy you are not a criminal. Just refuse to engage with them, let the policy run, do not send them the certificate and let them whistle for their £50 cancellation fee.

 

[longdogs]

It's obviously a con - all insurance is a con. Why not contact Money saving expert?

http://www.moneysavingexpert.com/

Or, if you have free legal advice on your policy, try asking them. And, remember to tell your insurance company that you will be switching to someone else next time.

 

[RNReindeer]

On this occasion, I agree with cajar. If you haven't cancelled the policy, let it run its course. Or even as Squeaky suggests utilise the legal advice with the policy if you have that available.

Unless you have cancelled the policy without considering the financial implications.
As I see it, if you cancelled the policy without consideration to the penalties, then you could argue that the insurance have every (legal but not moral) right to invoice you for admin costs that were explained up front.
However, this would be a purely civil financial matter, nothing to do with any offences of any sort.
It would be an offence to use a vehicle which has no insurance, but you're not doing that.
One of the ways of trying to avoid paying the full whack for insurance is when people take out an insurance policy on installemnts and stop paying the installments which leads to cancellation, but they keep the certificate in the hope of providing it as poof of insurance. But the Motor Insurers database has more or less removed that possibility.

 

[EFLImpudence]

Surely the £50 fee is only ever 'payable' by deducting it from a refund - fair enough.

Nobody in their right mind can expect people to pay more for NOT having insurance than they did when they were insured.

 

[cajar]

Totally agree, it's almost perverse. They want an extra £50 for not having the liability of insuring a vehicle for 5 months. Just shows how greedy corporations can be.

I also don't know how much his policy cost, but assuming they take the cancellation from january as a full month and cancel the 4 months to may, it means with an £8 refund they're refunding him £2 per month, or pro rata at £24 per year.

I would name them.

 

[longdogs]

I mentioned this to my wife who works for an insurance company albeit commercial property insurance. When one of their customers cancel a policy, the company refunds the whole amount remaining (on a daily basis no less - not to the nearest month) and does not charge a handling fee. So I think it must be down to the individual companies whether they charge for a cancellation or not.

 

[cajar]

My best guess would be the company are having cash flow problems and customers are cancelling policies, the £50 charge on top of a tiny refund is a quick fix to grab as much cash as they can from leaving customers.

 

[RNReindeer]

Excellent info' here, especially the bit about NCD:
http://www.confused.com/car-insurance/guides/how-to-cancel-your-car-insurance

FFR, some insurance companies allow you to suspend your insurance for temporary periods at little or no charge.