Car insurance.. cancelation fee?

pansypotters

Due to the fact that my hubby wrote the car off some weeks ago and after everything was settled he needed to cancel the insurance policy. Because we've replaced the car with something a little more unbreakable (land rover) he decided it needed a specialist insurer to cover it. We received a grand sum of £350 back from our original insurers for the wrecked car so they certainly aren't out of pocket! Now they are asking for a £45 cancelation fee. We had no choice but to cancel under the circumstances so are we legally bound to pay this extra charge?

Any advice would be much appreciated, thank you, Jan.

dacouch

Unfortunately if you have a claim on a policy then there is no refund of premium (If you have paid by instalments you would have to carry on paying the instalments or have them deducted from the claim settlement).

Most Insurers will allow you to use the balance of the policy to cover any replacement car.

If you speak to the Insurer or broker and explain the situation politely you might be lucky and get them to waive the cancellation fee

Quentin

When you say you had no choice, what do you mean by that?

(If the previous insurer was prepared to let you insure the new car, why didn't you use them until it expired?)

pansypotters

Thank you both for your advice. Dacouch I see what you mean, will try the polite phone call too.
Quentin, 'had no choice' probably the wrong phrase but 'no choice' in that they would only insure the replacement car for half the value of what we paid for it whereas the specialist insurer is unsuring for the full value, if that makes sense?

Jan.

Quentin

Was the old car scrapped? If so, point out to them that the cancellation is purely for admin purposes (politely), and adding a cancellation charge is especially harsh in the circumstances - their offer to only insure 50% of the value is almost bizarre!

(They will have "right" on their side, as the policy will provide for a fee should you cancel it, hence the suggestions to be polite, and hope for the best)

pansypotters

Yes Quentin, the old car was scrapped as written off. I believe insuring 50% of the value is something to do with 'book price' whereas the specialist insurer is prepared to insure the full cost of what we actually paid for the vehicle.

I will ask hubby to try a polite phone call and hope for the best, fingers crossed.

Jan.

Quentin

Do you have any NCD left to transfer? If not you could just tell them to forget about the cancellation!

pansypotters

Sorry for late reply Quentin, have just been having our evening meal. Yes we had 60% NCD left to transfer.

Jan.

instaunt

pansypotters wrote: »

Yes we had 60% NCD left to transfer

The no claims discount percentage is different for all insurers. But it sounds like you have a few years so need proof of that for your next insurer. Shame, as simply not cancelling until the renewal date would have been the best option here.

It is unlikely that saying "please", as one poster suggested, will actually have any effect - you're leaving them so why should they worry about making you happy?

... but, as they have every right to charge you that cancellation fee I have no other suggestions! So, put on your best speaking voice and hope you get someone sympathetic (or new) on the other end of the phone.

Simulacraton

What a lot of people don't understand is that insurance companies base your annual premium on just that, an agreement that lasts a year. Built into this costing is a base admin/broker fee for the year. When people cancel not only is there more work for someone to do, but the company is essentially out of pocket based on it's own accounts.

An insurance co. is like any other business, they have to cover their losses and try and turn a profit. It has to have projections and accounts that mean they can predict their growth/loss. If there was no form of annual contract and insurance was just a free for all with people changing insurers every day for a better monthly premium then it's likely either a: Insurance would cost a hell of a lot more, or b. there would be very few insurers and the ones there were could charge vast amounts as they know you have no choice.

In the case of a claim, full balance becomes payable if you wish to cancel. Pretty standard insurance procedures I'm afraid!

Simulacraton

On another note, when I lost my job and had to cancel my home insurance, the person on the end of the phone was very kind and understanding and instantly cleared it with their boss to waive my cancellation fee.