Cancelling my car insurance - advise needed please

l3sl3yd

Hi,
I took out a new car insurance policy in September - the premium was aprox £900 per annum including interest on direct debit payments.

The payment schedule was worked out at £136 deposit followed by 11 payments of £62 month. I paid oct, Nov and Dec...then gave 4 weeks notice to end the policy on 4th Jan as I was changing cars and got a better deal else where. Up until the date the policy was cancelled I paid a total of £343

The broker is now saying I owe them over £200 because I've had more cover than I paid for.......how can this be if the payments were spread evenly over the year and I've only used 4 months insurance cover?

I should add that I change cars every 6 months through my job and only have the choice of using 2 insurance companies, so over the last 10 yrs have had 20 cars, switching insurance companies many times, and have never had this problem before.

Quentin

You will have a cancellation charge to pay, an early settlement on your loan and extra premium to pay (exact pro rata isn't used when you cancel early).

Ask for the final amount they say you owe to be itemised.

mikey72

FSO has ruled there shouldn't be a punitive charge, it should be about pro-rata, and a fair cancellation charge. Ask for the breakdown, and tell them you intend to complain to the FSo if they can't resolve it.
There's a thread on the insurance section.

https://forums.moneysavingexpert.com/discussion/comment/39938318#Comment_39938318

victor2

Might be better to just change the vehicle on the existing policy and then let the policy run until its renewal date. I did that a few months back. That was for a policy paid in a lump sum, not by installments, but it still worked out cheaper to change the insured vehicle and pay a small adjustment (since the new car was a higher insurance group) than cancel the policy and take out a new one.

forgotmyname

Does usually work out cheaper to pay the admin fee to change cars than swap mid policy, Doesnt help that
the monthly payment is usually a loan not just a simple payment plan.

Not always though, Or you may have a car they wont cover.

If you had paid fully for cover the charges should be less. Good advice to get a breakdown
of costs then post back on here and someone will say if they think its reasonable or whether to take further action.

Also cancelling cover mid term wont accrue any no claims, That may be worth keeping the policy running.