Dosh dilemma: My cat’s dead, but my insurer says I still need to pay for the remaining 10 months of cover

When Sara’s cat, Morrissey, died recently, she went to cancel her policy, only to be informed she would still have to pay £970 for the remaining 10 months’ premiums. Her insurer said this was because she had made a claim (unrelated to his death) during the first two months of cover.

As shocked as she was to find herself nearly £1,000 out of pocket, Sara was more upset by the abrupt manner of the person she spoke to on the phone. Still feeling fragile following the loss of her much-loved pet, she was in tears by the time she hung up due to the complete lack of compassion and understanding shown by the customer service agent. Now she wants to know what her rights are.

We’re so sorry to hear about Morrissey, Sara. We’re also sorry to confirm that it’s common practice among insurers to charge customers for the full year if they’re cancelling a policy under which they’ve already made a claim.

How insurance works

Pet insurance is generally an annual policy. If you opt to pay monthly, your insurer is effectively lending you the money for the full cost that you then repay in instalments. Think of it as a loan rather than paying for your insurance on a month-by-month basis. As soon as you make a claim, you have in effect ‘used’ the policy, so you aren’t entitled to a refund if you go on to cancel it before the year is up.

Just like if you took out an interest-free loan to spread the cost of a kitchen over five years, and after four years you moved house, you’d still be liable for the outstanding payments.

Complaining about an insurer

Having said all that, the thing that Sara said upset her the most was her insensitive treatment at the hands of one of her insurer’s employees. If Sara wanted to pursue this,  she could choose to make a complaint.

When making a complaint about an insurer, you should go to them first, following their official complaints procedure (you should find this on their website).

If you’re unhappy with your insurer’s final decision, you can take your complaint to the Financial Ombudsman. Their decision is binding.

The information in this blog is not designed to be financial advice - the aim is to give an overview of money-related matters and point you in the direction of organisations and resources that can help when problems arise.