Cancelling car insurance

Rachybabesxxx

Hi, can anyone give me any advice?

I am insured through Yes Car Insurance with BISL underwritten by Axa and im paying £45 a month for a car i hardly even drive and after shopping around yesterday realised I could be paying£28 a month.

Just rung up to see how much it is to cancel and as i pay monthly and my car insurance isnt up for renewal until November they quoted me £190 pound to cancel?

Can they do this????

kingstreet

What do your terms and conditions say?

Mine say that on cancellation after seven months, the remaining premium for the year would be due, plus a fee of £35.

Car insurance is designed to run for the whole year. If you cancel early what are known as short cover rates are applied as if you'd taken out cover for only say, six or nine months, at the outset.

dunstonh

Just rung up to see how much it is to cancel and as i pay monthly and my car insurance isnt up for renewal until November they quoted me £190 pound to cancel?

Can they do this????

Yes they can. It is not pay as you go.

1 - you are using a credit agreement to pay an annual premium. The monthly amount you pay may not be in sync with the amount you owe.

2 - if you have bought ancillary products with the premium, such as legal expenses, AA/RAC breakdown etc then some providers have these as non refundable.

3 - there is usually a cancellation charge up to £50

4 - The premium is not exactly pro-rata on cancellation. It is typically +1 or 2 months. If cancel after 6 months and you have to pay 8 months.

The exact terms are published http://www.yesinsurance.co.uk/car-insurance/policy-insurance-cancellation.html

So, it looks like you owe 70% of the premium plus a cancellation charge plus ancillary product cost minus what you have paid.

mikey72

kingstreet wrote: »

What do your terms and conditions say?

Mine say that on cancellation after seven months, the remaining premium for the year would be due, plus a fee of £35.

Car insurance is designed to run for the whole year. If you cancel early what are known as short cover rates are applied as if you'd taken out cover for only say, six or nine months, at the outset.

Already been ruled as not acceptable by the FOS, so if the insurers try to claim that, complain, then complain to the FOS.

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

dunstonh

mikey72 wrote: »

Already been ruled as not acceptable by the FOS, so if the insurers try to claim that, complain, then complain to the FOS.

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

The FOS don't like big differences. They also don't like companies that do not publish their terms. In those cases getting the FOS to rule in your favour is quite easy.

In this case, the cancellation rates are not too far from pro-rata +1/2 months. Plus, the terms are clearly published (except the actual cancellation charge itself). So, an FOS ruling in your favour is less likely here.

mikey72

dunstonh wrote: »

The FOS don't like big differences. They also don't like companies that do not publish their terms. In those cases getting the FOS to rule in your favour is quite easy.

In this case, the cancellation rates are not too far from pro-rata +1/2 months. Plus, the terms are clearly published (except the actual cancellation charge itself). So, an FOS ruling in your favour is less likely here.

My maths and your's don't agree.
£45 a month, presumably paid and up to date.
So £190 is at least 3 months extra, and £50 cancellation.
After 7 months in they want paying for at least 10?
That's well away from pro-rata, which is the £50 (maximum)cancellation fee.
It seems a very good case.

dunstonh

My maths and your's don't agree.
£45 a month, presumably paid and up to date.
So £190 is at least 3 months extra, and £50 cancellation.
After 7 months in they want paying for at least 10?
That's well away from pro-rata, which is the £50 (maximum)cancellation fee.
It seems a very good case.

We know from the FOS that they don't require exact pro-rata cancellation rates. We also know what they consider unfair. ( for example: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm )

We just dont know what they consider fair as they havent published a rejection complaint to benchmark it. So, there is still some unknown there. Its left to us to guess whether its unfair or not. I dont see them as unfair in this case.

After 7 months in they want paying for at least 10?

Its not 7 months though. Its either 4 or 5.

That is around 45% of the time gone and they want around 60% of the premium. That is not likely to be considered unfair.

We also know the FOS have accepted admin charges up to £50.

We also dont know if there are any ancillary products that need to be paid for.

mikey72

dunstonh wrote: »

We know from the FOS that they don't require exact pro-rata cancellation rates. We also know what they consider unfair. ( for example: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm )

We just dont know what they consider fair as they havent published a rejection complaint to benchmark it. So, there is still some unknown there. Its left to us to guess whether its unfair or not. I dont see them as unfair in this case.


Its not 7 months though. Its either 4 or 5.

That is around 45% of the time gone and they want around 60% of the premium. That is not likely to be considered unfair.

We also know the FOS have accepted admin charges up to £50.

We also dont know if there are any ancillary products that need to be paid for.

November taken out, paid up to May, so maybe six months.
So an extra 3 months on that?
4 or 5 months, and the extra 3 months is even worse.

DCFC79

I think people need to read up on the term contract, OP you entered in a contract for a year and for you to break that it will require £190, itys usually your monthly premium times how many months are left.

mikey72

DCFC79 wrote: »

I think people need to read up on the term contract, OP you entered in a contract for a year and for you to break that it will require £190, itys usually your monthly premium times how many months are left.

I think people need to read up on what is already deemed unfair, and also not enforceable.
To terminate the contract early will require what the FOS decide is fair, which is not full payment.

DCFC79

mikey72 wrote: »

I think people need to read up on what is already deemed unfair, and also not enforceable.
To terminate the contract early will require what the FOS decide is fair, which is not full payment.

woah, as ive not cancelled anything early i wasnt aware of that