Thoughts on this please: Cancellation Charges

waveydave

Whilst just sorting out my accounts i realised that i have had cancellation charges on three car insurances which i ended early due to changing cars / getting a better deal etc.

Norwich Union - £44ish
Budget - £56 ish
Masterquote - £55 ish

If my thinking is right (which i admit it may not be) i was under the impression that you cannot be penalised ( and therefore charged) for terminating a contract so therefore the above "CANCELLATION CHARGES" would be unlawfull / illegal

I may have got the wrong end of the stick here and may be completely wrong so please feel free to set me straight so too speak.

what are your opinions ?

Essentially i have been penalised by all three for either finding a better / cheaper insurere or for changing my car

Thanks

WD

southernscouser

I don't think you can claim anything back mate. I'm assuming you were paying these monthly?

You enter a contract for the 12 months so I think they have a right to charge you for the remainder of it! :think:

Pan_3

Basically, all insurance companies stipulate cancellation charges but this is often hidden away in the usual small print.

Most first year policies are cancelled on a 'short term' basis....what this means is that if you have been on risk for over a specific period of time ie 4 months, there would be no refund of premium due upon cancellation. If you have been insured with the company for a number of years they will usually cancel on a 'pro rata' basis...meaning you would pay for the pro rata time on risk, a small cancellation charge ie £20 and then the rest would be a refund back to you.

Where this gets confusing is if you pay be Direct Debit. When you pay by DD the insurance company in effect, loan you the full annual premium and you pay this back monthly in installments. If you had a policy cancelled short term say after 5 months you would still be liable for the full DD's as no refund would be generated for the Insurance company to use against the outstanding annual premium.

Apologies if I've made a confusing subject even more bewildering. What I would say though is that if an insurance company ever apply short term cancellation charges to a policy, kick up a stink as they often will change these to pro rota which are far more benficial.

Xbigman

If you change cars you are often better off amending your current policy and seeing the year out, then switching for the following year.
Regards



X

chirpy007

I had the Post Office insurance which l got for £70 (no complaints there) but as my car was quite old l sold her with about 5 months insurance left, l rang to cancel and after this and that l was told l owed them £12 :mad:


i think not l said i will cancel the cancellation then !!!!!!!!! he said you just told me you were selling so l said now lm telling you im not !!!!!!! goodbye.


Such a rip off :mad:

immoral_angeluk

Can I ask why you have 3 insurance policies for one car?

waveydave

immoral_angeluk wrote:

Can I ask why you have 3 insurance policies for one car?

lol

i dont

we had two cars.

2 x cars both insured seperatly ( one for wife and one for me)

Changed wifes car - the insurance she was with wanted an extra £20 a month ( making 40 a month) for the new car so we cancelled policy and started a new one with another company that cost 17 a month ( with better cover incidentally)

we then got rid of both cars and brought one with the money from the sales

and again it was cheaper insurance wise to shop around rather than take an increase in payments to either of the other insureres. And now i have a much bettercar than the two before and i pay less insurance than one of them ( never mind the 2 of the policies together lol)

Therefore 3 old insurance policies

immoral_angeluk

ahhh.... makes sense now lol.

waveydave

immoral_angeluk wrote:

ahhh.... makes sense now lol.

lol

even with teh added cancelation charges it was cheaper to change insurances each time

for example Norwich union wanted £40 a month 3rd party F & T on a 3 series BMW where as teh company im with now i pay £19 a month to FULLY COMP !!!!

oh and incidentally an 8 year old bmw is cheaper to insure than a 20 year old ford escort - How they figure that one out ?

Pan_3

waveydave wrote:

lol

even with teh added cancelation charges it was cheaper to change insurances each time

for example Norwich union wanted £40 a month 3rd party F & T on a 3 series BMW where as teh company im with now i pay £19 a month to FULLY COMP !!!!

oh and incidentally an 8 year old bmw is cheaper to insure than a 20 year old ford escort - How they figure that one out ?

It is figured out by the use of statistics. Basically an insurance company can only calculate a premuim in relation to known statistical facts. Bottom line is that where you live, it is more likely that a Ford Escort will be stolen than the BMW or that more Ford Escorts are involved in accidents than BMW's. It could also be that an insurance company will view the driver of an older car as likely to be more reckless than the owner/driver of a newer car.

It may seem totally illogical at times but insurance underwriters apply a very logical and strict criteria to thier risk calculations that ensures that lose the least possible money.

leebarton

We were ripped off by budget insurance. They hadn't made it clear that you had to declare points even though they were no longer on the licence so told us they could insure us anymore and charged us over £110 to cancel because they said it was our fault.

To say the least I was not a happy bunny!