Cancelation fee robbery!!!

kittikat111

I previously set up an insurance policy with an insurance company called 'Insure Your Motor'... Because of my age and the car that i had and points, my annual insurance was very high just over £4000 pa. I was charged £1100 as a dep when i first set up my policy and monthly premiums were around £300-£400.

After researching the company online i found soo many people complaining about them and their services. I eventually found myself a cheaper deal and decided to cancel my policy.

A few weeks later i received a letter asking for £1,500 cancellation fee !!!!! I seriously couldn't believe what i was reading i had the policy for just over 2months! Thats over £3000 to be insured for such a short period of time.

I refused to pay the fee and have recently received letter from a debt company called 'Grosvenor' trying to get the money from me but i dont know where i stand on this? I'm 20 years old and no longer in the position to pay this kind of money to a company who already received alot of money from me for only being insured with them for 2months! Surly no company can charge this much for a cancellation fee are they within their rights to do this?

paddedjohn

I thought insurance company's could only charge £60 max, i may be wrong but im sure ive read it on another thread either on the motoring board or on the insurance board.

Optimist

Go through the insurance companies complaints procedure i.e. write a letter of complaint asking how they justify such high charges. Point out that under Schedule two of the Unfair Terms in Consumer Contract Regulations a excessively large cancellation fee could be deemed to be unfair and unenforceable in a court of law. Tell them that you are willing to go to the Financial Ombudsman then do so if they do not come back with a more reasonable request.

Tell the debt company that you are in dispute with the company and expect to hear no more from them.

dzug1

I suspect it's not just a cancellation fee - but a combination of that and short term policies not being charged at just pro rata rates.

Even so it looks on the high side.

squeaky

Hi,

The Insurance board does cover motors too, so I'll move your query across there and let let their experts at it.

Good luck

Forum_Team wrote:

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email forumteam@moneysavingexpert.com.

dogbot

You need to get a breakdown of the charge from the insurance company and understand exactly what you are due to pay.

You then need to check that it matches with the policy conditions which you signed up to.

There will be a cancellation fee probably of something like £30-£50 and the rest will be a charge for premium, time on risk and something to do with premium finance.

What you did was to take a high annual premium policy and buy it on credit (paying in installments). You cancelled part way though so there will be a charge for "time on risk", which most likley is weighted towards the start of the policy - this is because there is a lot of fixed cost built into a policy. Because you have bought on credit then there will be more to pay than you already have, possibly to make up for the time on risk not being exactly pro-rata and possibly due to the terms of the premium finance agreement you have entered into.

You need more information from the company - get the breakdown.

dunstonh

Please use the duplicate thread that is in progress. Otherwise it will get messy. Or maybe a board guide/mod will get the two threads merged if they spot this. The other thread has more specific information on it including the T&C from the company in question.

https://forums.moneysavingexpert.com/discussion/3141694

squeaky

Sorry, I can move threads across so that we don't have duplicates running on two forums at the same time - but I can't merge them.

Your own BG's will catch up soon

mikey72

dzug1 wrote: »

I suspect it's not just a cancellation fee - but a combination of that and short term policies not being charged at just pro rata rates.

Even so it looks on the high side.

At the risk of answering twice, short term policy is not applicable as the FOS have ruled on pro rata rates being used before.