There are a number of reasons why you might have to change your insurance policy during the year it is in force: for example, if you buy a new car or want to add another driver to your cover. Pretty much every provider will allow you to make straightforward amendments such as these, but in most cases you will be faced with an administration charge for doing so.
This will be on top of any increases in your premiums which could result from you changing to a more powerful or expensive type of car, or from adding a more inexperienced driver.
When do you need to make amendments?
Part of the terms and conditions of your motor insurance policy will be the obligation to inform your provider if there are any fundamental changes to the people or the vehicle they are insuring. Basically, your insurer needs to know if the risk they are covering changes in any way.
Major alterations must be brought to your provider’s attention — and failure to do so could result in your policy being deemed invalid, and any future claims being rejected or reduced. For example if you modify your car’s engine to make it more powerful, from your insurer’s point of view you are increasing the risk of being involved in an accident. If you fail to tell them about the modification, but they later find out when investigating a claim, they could take the view that you are underinsured and refuse to make a payout.
Why else might you need to change your policy?
- You want to add a named driver, such as a son or daughter
- You are planning a trip to Europe and wish to extend your cover to the Continent for a short period
- You or a named driver have changed jobs, or the way you use the car — for example if you start commuting with it
- Your or a named driver are given a conviction for a motoring offence
- You move home or change where the car is kept overnight.
- If you’re not sure whether you should inform your insurer about a change, it is best to err on the side of cautions: if it is relevant and you don’t inform them, you could risk driving without proper cover.
- You have modified your vehicle and your current insurer will not cover you.
How to make changes to your policy
When you need to make a change, call your insurer: the staff their will be able to tell you whether the policy needs to be amended, and how much the amendment will cost.
The standard amendment fee should be set out in your policy’s terms and conditions, so check you policy booklet in advance. In some cases, the firm will need to re-calculate your premiums. If the cost rises, you will then need to pay an extra sum to cover the increased price of cover. Your insurer will then send you new policy documents to reflect the changes.
Is cancellation a better option?
The cost of cancelling a policy is in the vast majority of cases much higher than making an amendment: not only is the administration fee greater, but you are unlikely to get a full refund of unused premiums. In some cases, when you make an amendment, the cost of cover will increase dramatically — for example if you add a young, inexperienced driver to your policy.
It could then be possible that you could save money by cancelling your cover, and switching to an insurer which charges lower rates for young drivers. Do your sums carefully to work out which would be the best option.
Action to take if you think charges are unfair
If you think the charges you face for amending your policy are unfairly high — or if you have had to make a change because of what you think is a mistake on the insurer’s part — you can complain to the company directly. Ask for an address for customer services, and write giving clear details of your case — such as what happened, when, and why you think you have bee unfairly charged.
Even if fees are laid out in the policy booklet, you may be able to challenge them. Keep a record anyone you speak to and of the letters you send (and use Special Delivery so you have proof they have been received). If the company does not deal with your complaint to your satisfaction, you can take your case at no cost to the Financial Ombudsman Service.