Car Insurance : cancellation of direct debit

Princess Ariel · 3 Jun 20, 12:46 PM

We pay for our car insurance monthly, it’s due to renew next month, however our final direct debit payment was made in May so the policy is now paid in full.
I cancelled the direct debit as obviously all the payments on the policy had been made, however today I have received a letter from the insurance company stating that because I have cancelled the direct debit my policy will be cancelled in two days time!
Can they do this? Surely they can’t cancel a policy when all the payments have now been made? The policy is in DH’s name so I can’t ring them but I have emailed and am waiting for a response.

400ixl · 3 Jun 20, 01:14 PM

Sorry to hear you have been put in this position. Why did you cancel the direct debit? There is no need to do that and yes they most likely have a clause that states you can't as it is also the mechanism that they would be able to claim any excesses if required.

This needs resolving quickly as having to declare you have had a policy cancelled by an insurer (which you legally have to declare) can have a big impact on who will insure you for what amount in the future.

You don't cancel DD's until the contract has run its term although you don't need to even then really.

Princess Ariel · 3 Jun 20, 01:18 PM

Thanks for replying. I didn’t realise this, I just thought that because we had made our final payment I was within my rights to cancel the direct debit (it just helps me to stay organised with the bills) I’ll get DH to contact them when he gets home from work and sort it out.

tspill · 3 Jun 20, 01:21 PM

It is gererally a bad thing to cancel a DD with the bank - basically you are ceasing the agreement with the supplier.
The way to stop a DD is through the supplier by ceasing the service and they will then stop collecting the DD money from your account.

In this case, there would be no need to stop the DD with the bank as the insurance service would cease after 12 months and the DDs would stop.

I think your only option is to contact your insurer and see if they will uncancel the insurance. I think technically you have cancelled your insurance by cancelling payment.

Was there a reason you cancelled this with the bank?

Princess Ariel · 3 Jun 20, 01:29 PM

Originally Posted by tspill

It is gererally a bad thing to cancel a DD with the bank - basically you are ceasing the agreement with the supplier.
The way to stop a DD is through the supplier by ceasing the service and they will then stop collecting the DD money from your account.

In this case, there would be no need to stop the DD with the bank as the insurance service would cease after 12 months and the DDs would stop.

I think your only option is to contact your insurer and see if they will uncancel the insurance. I think technically you have cancelled your insurance by cancelling payment.

Was there a reason you cancelled this with the bank?

Yes I cancelled just because we had completed all the payments... I realise this was stupid now 😫 I’ll get DH to ring them later and try and reinstate it, we normally just renew every year but the premium has been increasing more and more and looking at quotes from other companies we weren’t planning to renew this year and that’s why I cancelled the DD.

We’ve never claimed on the insurance and have normally just renewed every year so we weren’t aware of the rules.

400ixl · 3 Jun 20, 01:29 PM

Originally Posted by Princess Ariel

Thanks for replying. I didn’t realise this, I just thought that because we had made our final payment I was within my rights to cancel the direct debit (it just helps me to stay organised with the bills) I’ll get DH to contact them when he gets home from work and sort it out.

Fingers crossed they do.

Don't cancel DD's in the future, it is not necessary to do that. For any contracted service, not just insurance.

vampiress88 · 3 Jun 20, 01:49 PM

Unfortunately a lot of people do think that just by cancelling a direct debit through the bank means it’s all sorted.

There are usually two outcomes on cancelling a direct debit. The first is what you have done that in effect cancels the contract it will be in their terms. The other which is what we have at work is that the cmr Still has an ongoing account until they actually cancel with us and we will just charge them extra for non payment.

Always always cancel with the company.

Some companies will auto renew you as well and just cos you cancel direct debit this doesn’t always act as a cancellation and they could easily tie you in with that and bill you too

familybell · 3 Jun 20, 03:57 PM

Could it just be a standard letter that gets sent when a DD is cancelled

3 Jun 20, 01:14 PM	#2
	3 Jun 20, 01:14 PM 400ixl Imagineer
400ixl Imagineer Join Date: Mar 12	Sorry to hear you have been put in this position. Why did you cancel the direct debit? There is no need to do that and yes they most likely have a clause that states you can't as it is also the mechanism that they would be able to claim any excesses if required. This needs resolving quickly as having to declare you have had a policy cancelled by an insurer (which you legally have to declare) can have a big impact on who will insure you for what amount in the future. You don't cancel DD's until the contract has run its term although you don't need to even then really.

3 Jun 20, 01:21 PM	#4
	3 Jun 20, 01:21 PM tspill Imagineer
tspill Imagineer Join Date: Feb 13	It is gererally a bad thing to cancel a DD with the bank - basically you are ceasing the agreement with the supplier. The way to stop a DD is through the supplier by ceasing the service and they will then stop collecting the DD money from your account. In this case, there would be no need to stop the DD with the bank as the insurance service would cease after 12 months and the DDs would stop. I think your only option is to contact your insurer and see if they will uncancel the insurance. I think technically you have cancelled your insurance by cancelling payment. Was there a reason you cancelled this with the bank?