Car insurance cancellation fees Robbery!
Comments
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Tozer, raskazz is correct, An insurer may have a responsibility to pay if an insurance policy is in place, whether the policy holder is driving the vehicle or not. They may even have a responsibility if the vehicle is stolen. As a matter of fact, if you sell the vehicle you MUST tell the insurer and you MUST cancel the policy!
Google searching MIB Issue92006 (as a new user i cant post links) shows a document produced by the MIB for insurers and the flow charts should help you understand when Insurers would be acting under Article 75 and when they will be acting under the RTA.
The charges imposed by insurers may seem unreasonable but when you think about what it may cost you if the new owner remains uninsured, has an accident and then your insurers come to you for their outlay because you failed to cancel the policy and return the document... it could cost you far more!0 -
Hi!
I've just cancelled my car insurance which I've been paying monthly by DD. I've been quoted £123 cancellation fees!!! That's right! £123!!!! The original policy was only around £200. I've been told that if I don't pay this within 7 days I will incur further charges. I asked for a breakdown of the charges, and the person I spoke to said words to the effect of "There's a £50 cancellation fee from the insurer and well, some other charges, okay?!" Needless to say I am awaiting the written breakdown of the costs which I requested. This company is, by the way, a VERY well known one.0 -
I've been quoted £123 cancellation fees!!! That's right! £123!!!!
I very much doubt that is the case. More likely the £123 is both cancellation charge and outstanding premium required.
As your later comment confirms, only £50 of it is a cancellation charge. So, the rest will be outstanding premium.
its not uncommon to find monthly premiums are not in sync with the period of cover you are paying for and if you cancel mid term you have to pay more. Doesnt seem to be anything wrong here.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I very much doubt that is the case. More likely the £123 is both cancellation charge and outstanding premium required.
As your later comment confirms, only £50 of it is a cancellation charge. So, the rest will be outstanding premium.
its not uncommon to find monthly premiums are not in sync with the period of cover you are paying for and if you cancel mid term you have to pay more. Doesnt seem to be anything wrong here.
It will also be outlined in your policy booklet. Which of course you've checked, OP
I was born too late, into a world that doesn't care
Oh I wish I was a punk rocker with flowers in my hair0 -
I very much doubt that is the case. More likely the £123 is both cancellation charge and outstanding premium required.
As your later comment confirms, only £50 of it is a cancellation charge. So, the rest will be outstanding premium.
its not uncommon to find monthly premiums are not in sync with the period of cover you are paying for and if you cancel mid term you have to pay more. Doesnt seem to be anything wrong here.
When you say "outstanding premium" do you mean time on risk or a short rate charge? Auto Trader Insurance charges BOTH! Example - if you cancel one of their policies within 2 months of inception you are charged a £35 fee PLUS 40% of the annual premium. So, for a £300 policy canceled 59 days after inception, the earned premium would be £50 but the amount demanded by Auto Trader would be £155. How's that for "fair"?42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!0 -
When you say "outstanding premium" do you mean time on risk or a short rate charge? Auto Trader Insurance charges BOTH! Example - if you cancel one of their policies within 2 months of inception you are charged a £35 fee PLUS 40% of the annual premium. So, for a £300 policy canceled 59 days after inception, the earned premium would be £50 but the amount demanded by Auto Trader would be £155. How's that for "fair"?
Its fair because the bulk of the cost in administration occurs on day one. So, that work has been done whether the policy lasts the intended 12 months or 12 weeks or whatever.
Also, the margins and pricing are based on people paying for a year. By not going a year, the reduction in premiums received have to be passed on somewhere. Part will be factored in by the insurer in the initial premium and part against the policyholder calling it a day.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Its fair because the bulk of the cost in administration occurs on day one. So, that work has been done whether the policy lasts the intended 12 months or 12 weeks or whatever.
Also, the margins and pricing are based on people paying for a year. By not going a year, the reduction in premiums received have to be passed on somewhere. Part will be factored in by the insurer in the initial premium and part against the policyholder calling it a day.
Where do you get these fantasies? Do you ever tire of being an apologist for an insurance industry that too often treats its policyholders unfairly and cynically? Even for an IFA that's going a bit too far.42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!0 -
Where do you get these fantasies? Do you ever tire of being an apologist for an insurance industry that too often treats its policyholders unfairly and cynically? Even for an IFA that's going a bit too far.
Perhaps a bit more background reading *before* you start shooting people down (who actually know what they are talking about :whistle:) would be advisable I was born too late, into a world that doesn't care
Oh I wish I was a punk rocker with flowers in my hair0 -
When you say "outstanding premium" do you mean time on risk or a short rate charge? Auto Trader Insurance charges BOTH! Example - if you cancel one of their policies within 2 months of inception you are charged a £35 fee PLUS 40% of the annual premium. So, for a £300 policy canceled 59 days after inception, the earned premium would be £50 but the amount demanded by Auto Trader would be £155. How's that for "fair"?
Time on Risk is in effect the same as a short period rate or a pro rata rate as it is the technical name for the premium charged (Excluding any fees) for the cover provided after cancellation.0 -
Time on Risk is in effect the same as a short period rate or a pro rata rate as it is the technical name for the premium charged (Excluding any fees) for the cover provided after cancellation.
Thank you, but I knew that. I don't think the person to whom I was posting did.42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!0
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