CAR INSURANCE RENEWALS
An explanation of how to renew a car insurance policy.
When your cover is nearing the end of it's time period you will be invited to renew your car insurance policy. Motor renewal procedure follows the lines of accident insurance renewal procedures generally, subject, however, to modifications by reason of compulsory third party insurance.
you should be aware that at renewal No ‘days of grace’ are allowed. For practical reasons the renewal certificate has to be prepared in advance and it is made operative from the first day of the new period of insurance. This certificate cannot be issued until the renewal premium is paid, and if payment was made subsequent to expiry date would have to be re-written with the operative date coinciding with the date of payment. To issue the unaltered certificate would be tantamount to ante-dating it, which is an offence, whilst re-writing would be most inconvenient and uneconomic to insurers and would leave a gap in the insured’s cover.
In order to overcome these difficulties insurers incorporate in their renewal notices a certificate of insurance valid for 15 days. This extends the period in which the insured can pay the renewal premium and still receive a certificate dating from the first day of the new period.
The issue of this temporary certificate constitutes an offer by the Car Insurers which the insured must accept either expressly or by implication. Normally the fact that the insured tenders the premium within the period of temporary ‘Act’ cover is taken as an expressed acceptance of the offer and the new premium is deemed to include a consideration. If, however, the insured obtains cover elsewhere or by some action implies that he does not intend to accept the offer, the temporary cover is not available to him. Further, if he never receives the renewal notice, or was unaware of the text of the renewal notice, he cannot accept an offer of which he could not have been aware.
Many brokers had been in the practice of retaining on their files the official car insurance renewal notice prepared by the insurers (and thus containing the temporary certificate) and sending to the insured, instead, a renewal notice typed on a sheet of the broker’s own headed paper. The brokers, not being authorised insurers, could not include in their own form of renewal notice the temporary certificate issued by authorised insurers and even if an insured intended to renew with his existing insurers he would not be able to claim the protection of the temporary certificate whilst the renewal negotiations were under way: the temporary certificate, quite simply, had not been delivered to him and the offer to renew made by the insurers and contained in the temporary certificate likewise could not be said to have reached the insured. The Insured could not, therefore, accept an offer of which he was unaware. As a result of the court decisions and subsequent complaints brokers generally have ceased the practice of sending out their own renewal notice.
If they still choose to issue this document they should ensure that it is accompanied by the insurer’s official renewal notice or else the insured – and conceivably the broker as a result – could be in serious trouble.
A final notice is sent to the policyholder if the premium is not received after the issue of the renewal invitation but it is necessary to exercise care in dealing with late renewals. If the renewal premium is received after the expiry of the ‘Act’ cover included with the renewal invitation and the insurer is prepared to continue to insure the risk at the terms indicated, the permanent certificate of insurance must be dated from the time of the receipt of the renewal premium. For reasons of administrative economy and because car insurance policyholders tend to change their insurers with alarming regularity (usually because of a premium saving offered by another insurer and the availability of getting cheaper cover on the Internet), many insurers have had to end their practice of sending a final renewal reminder to policyholders. This may be particularly unfortunate if a policyholder genuinely has overlooked the payment of his renewal premium and intended to remain with his existing insurers. If the insurance is placed through the intermediary of a broker, there is less chance of an insured ‘slipping through the net’ in this way since brokers generally will be anxious to retain their clientele and may even issue more than one renewal reminder to an insured.
Motor renewal notices provide for the No Claim Discount, where allowable, to be shown and the attention of the insured is sometimes drawn to the fact that the discount will not be allowed if a claim should arise at any time prior to the renewal date of the policy.
Always shop around at renewal to secure the best cover and prices for you car insurance. Remember apathy will cost you money and there is always a cheaper deal to be had if you compare car insurance.
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