car insurance cancellation

feera

Hi
I have recently cancelled my car insurance after 5 months and been told I have to continue to pay my installments to cover a whole year worth of insurance. Why is this? I can understand paying a cancellation fee as there will be administration costs for them but don't understand why I should have to pay for the whole year if I am not using it. I dont even have the car anymore but am still paying. I also wasn't told this by the insurance broker on the phone at point of sale or cancellation. It may have been in the fine print but I must have missed it.
Any help???

dunstonh

I have recently cancelled my car insurance after 5 months and been told I have to continue to pay my installments to cover a whole year worth of insurance. Why is this?

What does it say about early termination in your policy documents?

I can understand paying a cancellation fee as there will be administration costs for them but don't understand why I should have to pay for the whole year if I am not using it.

You don't normally. Its not exactly pro-rata (e.g. if you cancel after 5 months you may have to pay 7 months worth) but you shouldn't have to pay the lot after just 5 months.

I also wasn't told this by the insurance broker on the phone at point of sale or cancellation.

You don't need to be told at sale. Also, at cancellation they may not be able to tell straight away depending on whom you spoke to.

It may have been in the fine print but I must have missed it.

Its normally in the section with a title along the lines of cancelling your policy.

Rolandtheroadie

Have you claimed against the policy?

Failing that, it might just be by the time they add up the cancellation fee and the "you've had short term insurance" fee (bennetts). It's eaten up all the refund. I ended up paying MORE for 6 months insurance than if it had ran for the full year.

instaunt

scotsman4th wrote: »

Have you claimed against the policy?

Failing that, it might just be by the time they add up the cancellation fee and the "you've had short term insurance" fee (bennetts). It's eaten up all the refund. I ended up paying MORE for 6 months insurance than if it had ran for the full year.

I've never heard of an insurer bothering to misword why they are keeping the money. And if you read some bennetts insurance reviews they read pretty much like any other insurer i.e. there's an admin fee -- often extortionate -- and a rounded up pro-rata. That does sometimes leave no money left but even then, the insurer will state this.

feera wrote: »

I also wasn't told this by the insurance broker on the phone at point of sale or cancellation.

I think this is where the problem lies. Whereas call centre staff with an insurer or their admin outsourcing will generally tell you exactly how they are screwing you over, if you speak to the broker that sold you the policy they have a good reason to lie as their commission might be affected. If I were you, I'd put in a complaint to the FSA, as having to fill out the policy term is uncommon.

Rolandtheroadie

instaunt wrote: »

I've never heard of an insurer bothering to misword why they are keeping the money. And if you read some bennetts insurance reviews they read pretty much like any other insurer i.e. there's an admin fee -- often extortionate -- and a rounded up pro-rata. That does sometimes leave no money left but even then, the insurer will state this.

Bennetts informed me that as my insurance had not went full term, I would be charged as if I had taken out a short term policy.
If I had called bennetts and asked for the six months insurance that I had actually had cover for, it would have been x. As I was cancelling after 6 months, x was the cost they wanted for the cover. Then I had the cancellation fee on top of this (£35?).
The insurance only cost around £105 for the year (upfront), they took £75 for 6 months cover and £35 to cancel meaning £110.

So whats the miswording?

instaunt

scotsman4th wrote: »

Bennetts informed me that as my insurance had not went full term, I would be charged as if I had taken out a short term policy.
If I had called bennetts and asked for the six months insurance that I had actually had cover for, it would have been x. As I was cancelling after 6 months, x was the cost they wanted for the cover. Then I had the cancellation fee on top of this (£35?).
The insurance only cost around £105 for the year (upfront), they took £75 for 6 months cover and £35 to cancel meaning £110.

So whats the miswording?

Exactly, they told you that they were going to charge you an admin fee and that you needed to pay 6 months worth which ended up costing more than your original insurance. The OP said that he was told that he had to pay the full year which doesn't sound right ... if they guy had turned around and said "well, due to admin fees and short term cover you're not going to get anything back" that is a totally different story from "you can't cancel, you have to pay the full year" -- it sounds like someone is telling the OP porkies in my opinion.

Rolandtheroadie

instaunt wrote: »

Exactly, they told you that they were going to charge you an admin fee and that you needed to pay 6 months worth which ended up costing more than your original insurance. The OP said that he was told that he had to pay the full year which doesn't sound right ... if they guy had turned around and said "well, due to admin fees and short term cover you're not going to get anything back" that is a totally different story from "you can't cancel, you have to pay the full year" -- it sounds like someone is telling the OP porkies in my opinion.

That clears it up.

The OP's never came back. I wondered if they'd cancelled their insurance due to have making a claim. It's amazing how many people think they can do this and not pay the full policy.

instaunt

scotsman4th wrote: »

That clears it up.

The OP's never came back. I wondered if they'd cancelled their insurance due to have making a claim. It's amazing how many people think they can do this and not pay the full policy.

You're probably right, especially with the OP saying:

feera wrote: »

I dont even have the car anymore

Instead of "I sold the car" - likely written off in an accident.