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What happens if you become 'spent' during an insurance term?


What happens if you become 'spent' during an insurance term?

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Christopher Stacey
Christopher Stacey
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Goodguy,

What you've got so far here is brilliant from the others.

The only thing I'd add is that mid-term underwriting is something that should be detailed in their policy. Normally, insurers don't require mid-term notifications (unless specific in their policy). This means that if you get a conviction during a policy, you don't have to notify, but similarly, if it becomes spent mid-policy, they won't change the policy (i.e. lower the price).

This is something we clarified in guidance to the insurance industry - the ABI guide linked to from our Insurance section of the Hub has a section on mid-term underwriting.



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Mintaka
Mintaka
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It is an interesting suggestion and one I can't imagine the insurance companies offering without a fight. It's true, using your example, if you change your car during the year and it has a lower insurance rating, they will reduce the premium accordingly. I have known premiums change because of speeding points being added or removed from a licence, but have never heard of it being challenged part way through the year.

Work out what it would cost to cancel the policy and re-new with a different provider. Could you make a saving? Many convictions don't alter motoring premiums that much.

I approached several of my insurers last year because under the new LASPO rules, my conviction is spent and although the act was law, it still hasn't been actioned, so they refused to reduce the premium at all. Now it has been delayed from April to November, it means yet another year of inflated prices! Not only that, but the cover is reduced which is a real worry.


Who said life was going to be easy?



Well, who said life was going to be easy?

Mintaka
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Cracking advice Eustace. The hub of the issue is, the conviction hasn't "gone away", just the requirement to disclose it has. So the assumption must be correct that if an insurer is aware of a conviction, regardless of whether it is spent or not, will continue to take it in to account when calculating future premiums.


Who said life was going to be easy?



Well, who said life was going to be easy?

Aspire
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Goodguy, my advice is to let it run and then renew as 'no criminal convictions' with a new provider. This will prevent questions coming back to haunt you or why you cancelled policy mid-term etc etc Once you get on any 'conviction' lists with insurance companies I am not sure of they really manage the data properly?!

In my experience (I am spent) there is not much difference between quotes sometimes.

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Eustace
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Goodguy said...
If I took out a 12 month car insurance policy for instance (paying monthly) and during month 6 I became 'spent', and hence if I were to get a new quote my insurance would be significantly less.

Is it then reasonable to ask the insurance company to consider my new circumstance mid term and provide a refund for the difference. Or is it better to cancel the insurance and take out a new insurance (legally I could go back to the same company with the revised quote but now without the conviction label) and proceed this way?

I also wondered how this would work and if any other have been in similar circumstances? I guess this goes for all insurances where you have to declare unspent convictions.


1. The insurer assesses the insurance risk at the time you take out the policy and decides your premium accordingly.
2. A mid-term change in material facts or circumstances is relevant to cover and you are normally obliged - in fact, you have a duty - to disclose it to the insurer within a reasonable period (no more than 30 days) of the change occurring.
3. However, that your conviction is now spent is not a 'material' change. The insurer based its premium on the fact of your conviction. Whether it is spent or not is not material to this.
4. My view is don't inform the insurer that the conviction is now spent as you are simply drawing the insurer's attention to adverse details above and beyond your legal duty to do so. In fact, you might well find your situation is worse, if anything. You are disclosing something that the insurer does not need to know and anything to do with a conviction is bad news, even if you think it's 'good' news. What do you want, a slap on the back now your conviction is spent? :-) You're more likely to get a slap in the face.
5. Better to just obtain quotes from other insurers prior to your renewal date, so you can be sure you'll have cheaper insurance with someone else now that the previous conviction is spent. I honestly wouldn't even bother with your existing insurer, unless they are superb and a loaded premium is worth it. I'd also advise that you do not return to that same insurer for, say, 10 years, or at least something like 5 years. This is to ensure that, if you do return to them, it's unlikely they will have any record of your prior business with them and, if they do ask, you always have the reasonable and credible excuse of having simply 'forgotten' about your prior account with them - but leave a sufficient gap so that the old records are destroyed.

If you don't follow my advice, and you either renew with them now or in the near future when they can still retrieve your records, they will continue to discriminate against you on the basis of your criminal record. The fact your conviction is spent is totally and utterly irrelevant from an underwriting point-of-view and I don't care what someone in their call centre tells you or what their policies might say. They will discriminate. The law allows them to because the effect of the Rehabilitation of Offenders Act is only to allow you not to disclose your own criminal record where you would otherwise have a legal duty to do so. The Act does not prevent an insurer from using material information about you, either now or in the future, for its own purposes. The insurer is a commercial profit-making enterprise and its interests are in conflict with yours.

Insurance is something you cannot take risks with: if disaster strikes and you badly need a pay-out, you don't want an insurer who is unreliable for some reason. That's why, so far as criminal disclosure is concerned, the Golden Rule should be: don't disclose unless there is a legal duty to do so, and that rule should be taken literally, both when it is to your disadvantage (honesty pays off in the end) and also when it is to your advantage (it's your legal entitlement).

Post Edited (Eustace) : 22/02/2013 23:23:28 GMT


Goodguy
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If I took out a 12 month car insurance policy for instance (paying monthly) and during month 6 I became 'spent', and hence if I were to get a new quote my insurance would be significantly less.

Is it then reasonable to ask the insurance company to consider my new circumstance mid term and provide a refund for the difference. Or is it better to cancel the insurance and take out a new insurance (legally I could go back to the same company with the revised quote but now without the conviction label) and proceed this way?

I also wondered how this would work and if any other have been in similar circumstances? I guess this goes for all insurances where you have to declare unspent convictions.
Goodguy
Goodguy
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Thanks for all the responses (especially Eustace), all the advise is very useful.
GO


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