Ask an Expert


I would appreciate some input and opinions on a point that has been causing me concern for a while. It relates to insurers applying new rates and terms to policies mid-term just because the client has altered something.

The latest case I have relates to a client who took out a private vehicle policy with Vero in October 2017. The policy has two vehicles covered under it. Last week he substituted one of the vehicles with a newer model. Vero tell me that the new rates that came into effect on June 1, 2018, must apply to this vehicle. They are also saying that this vehicle is subject to the higher standard excess level and windscreen excess that also came into effect at that time. So we now have a policy with two vehicles that are subject to different terms? It does not seem logical to me. I should point out that we have had similar problems with other insurers. Surely if a policy is taken out for a year then the terms that were agreed at the outset apply for the period of the contract unless of course there is a material change to the risk. I cannot see how the substitution of a similar vehicle allows an insurer to introduce new terms and rates mid-term. 

Reply…  Crossley Gates

You are correct that one of two parties to a fixed 12 month contract cannot unilaterally make changes to its terms part way through it, without the others consent. However, one exception to this is if an existing term of the contract allows this. 

The terms of the policy allowing substitution of vehicles midterm may allow the insurer to adjust the premium and other terms in relation to the substituted vehicle. if so, the insurer is free to do this.

December 2018

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