car insurance rip off

gemma6216

I have a golf insured through express insurance since july last year, i have been looking through comparison websites and have found other insurance companies which will cover for half of what the current insurance company is charging.
however when i rang express insurance to arrange a cancellation on the account they told me that it would cost me £520 to cancel the policy i argued this as the contract states a £50 cancellation fee if paying by monthly installments.
however they said that i have to pay the shortfall to the finance company that has paid them.
can anyone please advise as to whether they have had this problem before i am currently experiencing financial problems, and i have been driving for 6 years and have always had a refund when previously cancelling earlier than the renewal date. i also paid £140 deposit for the car insurance.

neilmcl

What does your policy say? What was your total premium?

olly300

You could post this on the insurance board for a better response from those who work and have worked in the industry.

In short -
1. Insurance is a 12 month contract
2. Most of the cost of insurance is in the beginning of the contract
3. When you pay it monthly you are paying a credit agreement where the company has paid the cost of the insurance for you, and you are paying them back the loan in equal instalments with some interest for the loan added on.

This means if you cancel early you owe them more than what you have paid.

gemma6216

the total premium is roughly £600, the monthly installments (10) are £76.00
the policy states
make any any requests for cancellation in writing, docs returned etc.. charges for our service will apply in accordance with the tariff of fees. the terms of your policy may allow insurers to retain the premium in full or to charge short-period premiums in the event of a cancellation. any shortfall in premium following cancellation will be your responsibility and irrevocably authorise EISL to deduct any shortfall from any refund generated under any policy held in your name where appropriate. However, if you are paying by installments we will take payment of £50 from your credit/debit card at the point of processing your cancellation.
I possibly should have read the small print on the terms and conditions more carefully, this is the first time i have ever heard of this. fully aware that most insurance companies charge a cancellation fee. but i have only ever had to cancel once due to competitive prices and no family or friends have ever experienced this.
well ideas of cutting back financially are out of the window.

patman99

It is commomn practice for brokers to do this. Also, certain companies such as Highway & Direct Line also do this. It stops you taking-out a policy to, for example, get your car back from the pound when stopped for driving uninsured, and then cancelling the policy shortly afterwards.

Personally, I avoid brokers (and that includes the AA, RAC, Swintons, Swiftcover etc.) as they want thier 20% for selling you the policy.