Cancellation Periods on Car Insurance

ajwindmill

I have just sold my car after only having it for 7 weeks. I pay monthly for my insurance. When I rang the insurance company to tell them I was selling it, they quoted me £115.29 to cancel. When I actually sold the car and rang them yesterday ( a week later) they quoted me £150.77 AND I had already paid them another months insurance. They said if I left it for another week then it would be almost £200. I sold the car as I couldn't afford to run it and now they want to charge me ridiculous charges for cancelling. It would have been cheaper not to had it insured and face the fine. What do you guys think of these exhorbitant charges?

A1dan_2

I think they're a total rip-off frankly.

I've seen some on here say "yes, but you signed up to the T&Cs", but no company has the right to just put any outrageous clauses they fancy into a contract.

Having searched for previous posts relating to my original one here, I'm amazed at the number of people complaining about this - I coudl see it giong the same way as punitive bank fees etc and becoming an issue that people start to stand up against.

StephenMarsh

Thats all very well A1dan but I can gurantee one thing if cancellation charges were abolished then the cost of insurance would rise further. The reason for high cancellation costs and why they are loaded to the early part of a policy is simply to put people off taking out short term insurance as it isnt cost effective for insurance companies.

It is also in place to prevent insurance fraud as I am afraid all to many people would take out a 2 week policy with the sole view of getting an insurance certificate so they can tax the car and then cancelling the insurance, this used to happen a lot going back 15/20 years before the advent of scaling cancellation charges.

People can stand up all they want but there are legetimate reasons behind insurance cancellation scales unlike bank charges

A1dan_2

StephenMarsh wrote: »

Thats all very well A1dan but I can gurantee one thing if cancellation charges were abolished then the cost of insurance would rise further. The reason for high cancellation costs and why they are loaded to the early part of a policy is simply to put people off taking out short term insurance as it isnt cost effective for insurance companies.

I just don't get that.

I can go online, get a quote and buy a policy in a matter of a couple of minutes. They'll charge me an extra fiver or something if I want them to send me a paper copy, but other than that, what are the incremental admin costs of somebody setting up or cancelling a policy?

What am I missing?

StephenMarsh wrote: »

It is also in place to prevent insurance fraud as I am afraid all to many people would take out a 2 week policy with the sole view of getting an insurance certificate so they can tax the car and then cancelling the insurance, this used to happen a lot going back 15/20 years before the advent of scaling cancellation charges.

That's fair enough, but surely there are better ways to prevent this kind of dodge?
It seems very archaic in this day and age, when anybody with appropriate authority can get the full ownership, insurance and tax status of a vehicle up on their screens in a matter of seconds.

StephenMarsh

A1dan wrote: »

I just don't get that.

I can go online, get a quote and buy a policy in a matter of a couple of minutes. They'll charge me an extra fiver or something if I want them to send me a paper copy, but other than that, what are the incremental admin costs of somebody setting up or cancelling a policy?

What am I missing?



That's fair enough, but surely there are better ways to prevent this kind of dodge?
It seems very archaic in this day and age, when anybody with appropriate authority can get the full ownership, insurance and tax status of a vehicle up on their screens in a matter of seconds.

Your addressing an industry that in large is archiac in all honesty but also an industry that is frought with fraud and sometime sthose archiac proceedures just work best.

If they can erdicate uninsured drivers then maybe some of these measures maybe relaxed but as there are too many unscrupulous people about this is unlikely to happen so I cant see a change any time soon

ajwindmill

I agree with what you are saying Stephen but why do I have to pay MORE for an insurance which is lasting longer. They said it was £150.77 if I cancelled now, but almost £200 if I cancelled in a months time AND I will have paid another months insurance.

StephenMarsh

ajwindmill wrote: »

I agree with what you are saying Stephen but why do I have to pay MORE for an insurance which is lasting longer. They said it was £150.77 if I cancelled now, but almost £200 if I cancelled in a months time AND I will have paid another months insurance.

actually that I dont know that doesnt sound right. Your cancellation scales will be in your policy I would start by double checking those. Which insurer are you with ?

ajwindmill

I am with the Post Office. Will check documents again but couldn't see anything the first time I looked.

StephenMarsh

ajwindmill wrote: »

I am with the Post Office. Will check documents again but couldn't see anything the first time I looked.

Thay have to provide you with cancellation charges

ajwindmill

Just found it. It says: If you cancel within 1 month = 30%, 2 months = 40%, 3months = 50% etc etc