Today I received a phone call from my car insurers - Hastings Direct. I was told that the underwriters (Highway) had given Hastings Direct the wrong price for my car insurance and they were therefore going to cancel my insurance. I asked how long I was covered for and was told my insurance will expire in 7 days. I was told they can set me up with a new insurance policy but that it wouldn't be at the same price.

Are they actually allowed to do this??? I have documents from Hastings Direct confirming that I am insured until June 2008, I paid my premium in one lump sum so I have paid for the entire year. Can they really just cancel my policy via phonecall and leave me uninsured? If they are able to do this then am I entitled to a full refund of what I paid for the years insurance or only the proportion of the year from the date they cancel it onwards.

Please could you advise me of my rights and where I stand with this. I have asked Hastings Direct to put it all in writing to me as the person who rang me did not explain very clearly what was happening, just that they were cancelling my policy and that in 7 days time i will be uninsured!!