When a policy has been cancelled due to failed direct debits

In yesterday’s post we talked a little about making sure you give all the correct information when getting a quote for car insurance. One example of this is when you are asked the question ‘Have you or has anyone else named on the policy ever had an insurance policy cancelled or had special terms imposed’. Now, off the top of your head you might not take this question all that seriously and you might think it only relates to some sort of insurance fraud you may have committed or something along those lines, leading you to believe that you can answer a solid ‘No’ to this question. Actually though, could it be possible that you have actually had your car insurance cancelled at some time in the past, perhaps because of something as simple as failing to pay your direct debits on time?

If after thinking back over your life as a driver you realise that you have in fact had a policy cancelled in the past because of failure to pay your direct debit instalments on time then this could throw up a bit of a dilemma because – if you answer yes to the question on the quote form – it can drastically affect the cost of the quotes you are given on comparison sites as well as knocking many potential reputable lenders from the list of those willing to offer you insurance. If you were to be ‘selective’ with the truth though and were to not mention that you did once have a car insurance policy cancelled for this reason, well then you run the serious risk of your car insurance company voiding and not paying out on your policy in the event of a claim if they were to find out. This all seems a little harsh though doesn’t it? I’d agree that it does seem harsh but unfortunately it is often the way car insurance companies work. Sure you may get lucky and have them still pay out because they don’t do their homework but do you really want to risk it? So what if anything can be done to help you secure the cheapest car insurance quote possible when you have had your policy cancelled in the past due to unpaid direct debits?

All may not be lost

In this situation if you want to take the honest route and don’t want to risk the insurance not paying out then I would strongly advise that you get on the phone and start ringing the insurance companies directly and explaining the exact problem. You may find that some are actually more than willing to still offer you a policy in your particular circumstances, others might insist on payment upfront but they may give you the same rates as everyone else if you do so. The important thing is that they have been fully informed by you of the reason for a previous cancellation of a policy and that you have something in writing from them – either on the policy document or in letter form – to state that this is the case. Having a policy cancelled because of a mess up with a direct debit and having a policy cancelled because of fraudulent activity or a criminal conviction are two completely different things and if you liaise with insurance companies regarding this you might just find that some reputable insurance companies are willing to agree with you and not charge you an arm and a leg for your cover.

Where to Start

It may still be worth getting quotes from comparison sites on the basis that you had never had a policy cancelled in the past just to find out which companies would be offering you the cheapest quotes and then you will at least have an idea of which companies to contact first in your search for the best possible quote available in your circumstances. Also, don’t forget to try out the insurers who don’t list their policies on comparison sites.

Note: Insurance companies do change their criteria regularly so I can’t guarantee that companies will always be so lenient but it surely has to be worth a try, right? If you do succeed in finding a cheap quote even though you’ve had a policy cancelled in the past due to problems with a direct debit then please do let us know for the benefit of our other readers.

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