Car insurance cancellation help?

mjs12345

Hi, my sister has just sold her car. She was paying monthly (about £100 per month) and the insurance was due to run until october. She rang up to cancel and she was told she had to pay the whole amount up to the end of the year! About 400 quid! I've never heard of this before, is it normal? Any way round it? whenever i've cancelled my insurance i've only had to pay 50 pound however far i am into the year.

dunstonh

I've never heard of this before, is it normal?

It can be depending on where you are in the policy year.

On cancellation, its not pro-rata. Its not 1/12 of the annual premium each month. You can find in the last 3 months that you dont get a penny back in your premium. In the last 3-4 months you can find that you get some premium back but if you pay monthly, the cost of credit and the the fact the monthly payment wont be in sync with the cover can mean that its not worth calling it a day.

She should ask the insurance company to provide a breakdown of the charge in writing. e.g. annual premium, cost of credit, minus refund for early cancellation, plus charges for early cancellation, minus premiums paid etc.

Once you have the figures you can see if they are reasonable or not or it an error has occurred.