Stay Insured

AA Insurance supports MIB campaign

24 September 2009

AA Insurance is fully behind the MIB 'Stay Insured' campaign launched on 25 September and adds its own experience of defaulting customers in the story that follows. There is also a case study that is genuine.

AA Insurance welcomes the Motor Insurers' Bureau (MIB) 'Stay Insured' campaign, which is aimed at drivers who may be thinking about letting their insurance lapse on renewal or cancel it because of financial difficulties.

AA Insurance, has reported a 17 per cent increase in the number of customers paying by direct debit who have defaulted, underlining the importance of this campaign.

Simon Douglas, director of AA Car Insurance, says: "The MIB initiative focuses on the vital importance of keeping your car insurance up-to-date.

"Customers who cancel their cover or don't renew run a serious risk of being stopped by the police, who are increasingly using automatic number plate recognition technology to identify uninsured drivers.

"If you have no insurance, your car will be confiscated, is likely to be crushed and you will be prosecuted. The police are stopping 500 vehicles suspected of being uninsured every day1.

"Last year, 185,000 cars were seized and 40 per cent of those were crushed1. It's just not worth the risk."

Check the registration number

Douglas is also urging people to check that the registration number on their certificate is accurate.

"We have noticed a sharp increase in the number of customers being stopped because they have recorded the registration number wrongly. Common confusions include letters and numbers such as 0 and O or 1 and I (such as some Northern Ireland plates). Getting numbers or letters transposed or confusion between similarly-sounding letters (such as N and M) is also surprisingly common – it's easy to do. Insurance staff can make mistakes too."

He warns: "Simple errors like this can result in a lot of wasted time and inconvenience – to say nothing of the typical £150 charge plus £20 daily storage cost to recover a car that has been confiscated"

Continuous insurance

In 2011, the Government is tightening up car insurance rules by introducing continuous insurance enforcement (CIE) which means that cars must be continuously insured even if they aren't being used, or a 'Statutory Off Road Notification (SORN)' sent to the DVLA.

Douglas adds: "It is unacceptable that law abiding insured drivers pay more because of the uninsured – on average, honest motorists pay £30 as part of their annual insurance premium to pay for the victims of uninsured drivers."

Case study

Mr P loses car; picks up 6 points and a £300 fine

Mr P bought his car insurance through AA Insurance in January 2009, electing to pay a deposit and meet the balance through direct debit payments. However, once his documents were delivered he cancelled the direct debit mandate. Several attempts to persuade Mr P to reinstate the mandate failed. Eventually he was warned that his policy would be cancelled (including a letter sent by recorded delivery) and cover was stopped in April. He was asked to return the insurance certificate, which he declined to do.

In May Mr. P was stopped by police whose automatic number plate recognition equipment alerted them that the car appeared not to be insured. Mr P showed the officers his apparently valid certificate of insurance but they nevertheless contacted the Motor Insurance Database police helpline which confirmed that the certificate was no longer valid. The AA similarly confirmed that the insurance had not been reinstated. Mr P's car was confiscated on the spot and he was charged with driving without insurance. Evidence came to light that Mr. P had similarly defrauded insurers over the previous two years so the court fined him £300 and his license was endorsed with 6 points.

Mr P will find it very difficult to find an insurer prepared to offer cover in the future. And if an insurer does do so, the premium will be extremely expensive and it will have to be paid in full up-front.

factfile

Total direct debit failures including failure to collect as well as DD cancellations has risen by 17% year to date compared with same period 2008

1Source: MIB

Case history source: AA Insurance

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25 September 2009