Cancelling Car Insurance

susantrebor

I just had to change my car as I kept breaking down. The insurance quote I had with my current insurer was very expensive, so i shopped around and went with my bank. On canceling the insurance with Direct Line, despite being a customer for more years than I can remember, they are charging me over £100 to cancel, I understand there would be a cancelation fee, but £100?:eek: This means I am paying almost a full years worth of insurance for only 6 months use! When I complained I was told (in a round about way) tough, you shouldn't have cancelled, pay up or we will take u to court!:mad: I gave them the opportunity to give me a better quote, but they do not give discounts unless its a new online customer. I think the faithfull customers have been financing the discounts! Have I just been plain stupid?:rolleyes: Or do I have a right to feel angry?:mad: Is there any other way, or do I just have to pay up? (I'll make them wait!)

mattymoo

According to this document http://www.directline.com/motor/ImportantInformationLeaflet.pdf
The DL cancelation charge is £26.25. The remainder will be premium you owe for the period of time they have covered you although this will be charged at short term rates.

In simple terms, this means each months cover does not equate to 1/12 of the premium. Commonly after 3 months cover 6 months is owed, after 6 months then 9 months is owed and after 9 months, the whole lot is due. This is because the insurers costs are front end loaded, the setting up of the policy, issuing documents etc.

susantrebor

Thanks for your comment, but that is not what they told me! Added on is half the cost of the breakdown cover, which is what they say I have to pay to cancel that. I thought it all came under the same policy, but apparently it doesn't. Once I have paid the £100.71 they are demanding, the total I will have paid will be £50, short of the whole years ammount, which isn't nine months worth, its more like 10+!

mattymoo

Ah the breakdown cover does alter things a little. Quite a good argument for keeping the two separate.
The figures I gave are an example. You can ask DL for a full breakdown of how they've arrived at the premium.
It may pay to stay with them for 6 months, gain an extra years NCD and then move insurer.

zkw29

Direct Line charge for the exact number of days cover used + £26.25 cancellation charge on the insurance and 50% of the annual premium on breakdown. Mattymoo has linked to the insurance document and the Direct Line website will have the Rescue document as well if you don't still have your own. (Sorry internet isn't working great so can't load the page to link to it myself).