Your car insurer needs to know of any change in your circumstances that might affect your policy. So if you make a change before the end of the period of insurance, this is called a mid-term adjustment (MTA).
This is important, as your premium can go up or down for a number of reasons. There's also a risk that any claim might be declined or not paid in full if it emerges that you didn't make an MTA when necessary.
When would I need an insurance policy adjustment?
There are many reasons you might want to make a mid-term adjustment. You might wish to add a named driver to your policy; sell your car and buy a new one; fit your car with a powerful new engine; or you might be changing your personal details – such as your maiden name.
A very common reason for making an MTA is if you change address. If you move from a major urban centre like London or Greater Manchester to somewhere a little less hectic, you might see your premium fall.
On the other hand, if you live in the country but still work in town, you might need to inform your insurer about the lengthy journey your car makes every day. An MTA will also be required if you start using your own car for business or you get points on your licence.
It isn't hard to make an MTA. If you buy a new car, for example, just tell your provider the new vehicle details. You shouldn't drive until your policy is updated, however.
Do I really want to make an MTA?
If a change in circumstances affects your insurance policy, you probably do. If you don't, you may well find yourself without cover. You may decide to park the car that you normally keep in the garage out in front of the house, for example. If you haven't told your insurer about this, and something happens to the car, you may not be covered.
If you put a new engine in your hatchback and it's suddenly a beast, your existing policy may not cover that either. And obviously, if someone else is going to be doing most of the driving for you, they won't be covered unless you add them to your policy.
Although, if this is a temporary arrangement, you might consider short-term insurance. In cases such as these, you will need to make an insurance policy adjustment. It would be best if you told your provider before you make the change in question.
Even if you're not certain you need an MTA, they'll be happy to hear from you – there's no harm confirming that your policy is bang up to date.
Why are insurers cautious about policy adjustments?
Insurers have to be wary of people using MTAs to try and get a low premium by being less than honest about the risk they present. A customer may, for instance, take out insurance on an average car and then attempt to add a much more expensive one. Or someone might try to add a second person to their policy who's a higher risk driver than themselves.
In some cases, fraudsters might use stolen personal information to make what appears to be a legitimate claim, and then use MTAs to add named drivers of their choosing.
Insurers have to make their verification processes more stringent as a result of scams like these, so if you do find making an MTA difficult or costly, that could be one reason.
Is there a charge for an MTA?
Probably. In 2014, price comparison website GoCompare.com surveyed 225 insurers and found that most had administrative charges for MTAs. A majority of those charged over £20, and most still charged a fee even when the customer went online and made the change themselves. Some providers won't charge for changes made online, though.
Your policy should contain details of any administrative charges, but some don't, so you may have to call your provider for exact figures.
If you're looking for a new policy, try and have a look at these charges before you do. Prices will vary from insurer to insurer, so it could really make a difference if you shop around. Again, you may have to be a press a little for answers on administration fees.
Why do providers charge for changes to car insurance?
There are several reasons why insurers may charge you for a change to a car insurance policy. Not only are there staffing costs to answer the call and make the change, but there are often system costs to process and analyse the new information which may include a premium recalculation, and of course, the production of new customer documentation.
Most insurers will ensure that customers are charged a fair amount to reflect the costs involved in making changes to a policy and will regularly review fees in line with the market to ensure they remain appropriate.
What happens if I cancel my policy during the cooling-off period?
According to UK law, you have 14 days to change your mind about any insurance policy you have purchased. This is known as the 'cooling-off' period, during which you're entitled to a refund. However, insurers can still charge for however many days the policy was active and they're also allowed to charge an administration fee.
Again, it's probably worth shopping around and asking plenty of questions to avoid surprise fees. If you do feel you have been unfairly charged for an MTA or cancelling your policy, you should ask your insurer about it.