Car insurance.. cancelation fee?

Quentin

Simulacraton wrote: »

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......

That is irrelevant in this particular case.

The premium has been paid for the full year. No-one loses any commission. In fact it is in the insurer's interest to let the policyholder go elsewhere - they no longer have the insured as a liability.

There are no extra costs to the insurer involved in the cancellation (had the policy continued to expiry, the insurer's admin would have been more than they have been involved in by cancelling - a renewal offer would have to be generated, together with a renewal notice/proof of NCD issued).

Issuing a proof of NCD as a goodwill gesture would have been by far the best business decision - their customer may not have been lost forever (or turned into a walking bad news ad for them!).

When they get named and shamed, the bad publicity will cost them far more in lost business than they have gained in profit out of this admin charge.

Simulacraton

If they've already paid in full then sure. In that scenario I'd query why there is a cancellation fee at all as none of the premium is to be returned anyway due to the claim.

I was kinda on the wrong wavelength thinking of direct debit arrangements instead