Cancellation Periods on Car Insurance

lisyloo

but other than that, what are the incremental admin costs of somebody setting up or cancelling a policy?

What am I missing?

Let's suppose you call to cancel.
They need staff to answer the call.
This means they need

buildings, electricity, buildings insurance, fire entinguishers, training, pensions, sick days, national insurance, printers, computers, software, paper, envelopes, IT staff, desks, chairs, telephones, paid holiday, toilets, kitchen, first aid box, health & safety policy, liability insurance etc. etc.

Let's suppose (just paying devils advocate for a minute) that I am a customer that does not change my address/car/husband during the year.
I want the lowest possible price but do not want to subsidise people like you. That might sound harsh but let's not forget your short term need springs from a desire to maximise your personal profit from the car sale.

Logically this means that you and you alone should shoulder the fair share of the costs above.

I see it as similar to RyanAir.
People get a rock bottom price, but have to pay for baggage and additional services on top. Only the people that want the services pay so other people don't have to subsidise them.
This works in the airline industry because people know that they get a great deal on the flights.
I don't think people can see that they are getting a rock bottom price on the insruance in the firts place for an annual policy as that's not as clearly obvious as a 1p flight.

So I would say that annual insurance is heavily discounted rather than you're being stung.

Does that explain it somewhat?

I don't see there being a "revolution" and people standing up.
Firstly because what is "fair" is already defined by outside bodies.
Secondly because it affects a minority and in many of those cases the charges aren't that bad - for example it works out much better if you cancel a policy with 11 months than one with 1 month.
Yours it a worst case scenario so you are at the expensive end of the spectrum.

A1dan_2

Kind of, but it doesn't really differentiate it enough from a lot of other industries who get by without such fees. Everybody has staff to pay for.

Especially in the age of being able to do all this online, administrative costs are a fraction of what they were, and this has freed up many industries to compete opn genuine bottom line prices.
(Aside from the other point about uninsured drivers) I don't see why the insurance industry can't fall into line with a whole host of other service industries and move away altogether from restrictive fixed term contracts, and compete as say utility companies do for each others business.

All comes across as a bit of a cartel really, but then that's not surprising when there are so many brands representing so few actual players, I guess. The whole culture is one of creating a charade of competition and choice.