"Reputable" Car Insurance Sharp Practice, but what to do?

Lou101_2

Problem: I bought car insurance for a MINI Cooper in April 2010
Sold mini cooper [just yesterday] in Dec 2011
Bought replacement vehicle VW Polo today, Dec 2011
Old insurance yearly premium [from Post Office] for MINI £549 [2004/value £5500]
New insurance premium [from Post Office] for VW Polo £500 [2002/value £1200]
I am female, in my early 40's never had any accident or parking ticket AT ALL.
Cheapest online quote: £271 [Echoice]
Cheapest online quote: £346 [Post Office]

Now here is where you are relieved of your trousers. I want to go to the cheapest company. I 'phone the Post Office and tell them I want to cancel my policy which runs up to April 2012. I am informed that I need to pay a cancellation fee of £35 plus £143 a total of £178 for cancelling the policy before April 2012. BUT, if I stay with the Post Office I don't have to pay the £178. Ok I say, but I can have the policy for the £346 as shown on the moneysupermarket website? NO, that I am told is an "introductory price for new customers" For me, being an existing customer I need to pay the £500, BUT by taking out the new policy [for 12 months] they will waiver the £178 charge.
To sum up, the whole policy is set up at the outset to catch people like me [which is the vast majority of the car buying and insuring public] out. Unless I sell my car when a car insurance policy expires I am it would seem condemned to either pay a premium, or pay a very large percentage of the "unused" policy, in this case up to April 2012.
In a nutshell I have these options
a] Cancel the policy [£178] and get the Echoice policy [£271]. Total cost £449
b]Pay the Post Office policy £500, even thought the online option that I can't have is £346
BUT why can't I--like millions of people have previously done--just cancel the Post Office policy [don't forget, I've never had any claim of any sort for or against me] and get the Echoice policy for £271 or new Post Office policy for £346? Why have I got to pay £178 for something I've never had/used. Don't forget from this £178 only £35 [which is more than enough] is for cancellation.
I've been told by the Post Office that this is all noted in the documentation sent out and I'm sure it is, but who reads that? This is extremely sharp practice, which as far as I am aware has only surfaced recently, it beggars belief that it is lawful. The last time that I shopped around for insurance [after cancelling free of charge a car insurance policy that had not seen out its twelve months] I 'phoned back several times to several insurance companies. Each time the price would go down, as it was competitive. Now, this time from the Post Office I am given absolutely NO discount, no matter how many times I call back. They don't have to do they if they can hang the-as in my case-£178 charge on existing customers.
In conclusion I'd appreciate hearing from anyone that has had similar dealings or advice on how to counter this.
Regards
Lou

mikey72

Cancellation should be a pro rata refund, plus the £35 fee. So ask them how they are calculating the excessive charge.
FOS guidelines

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

A lot of insurers will try to overcharge when you change cars, as you are captive, and if you suggest cancelling, they will try to penalise you there as well.

I was pleasantly surprised by Axa though recently, I changed for a similar group car, they only charged a reasonable admin fee, and actually gave a slight refund on the premium, which reduced the fee. The insurance was a good price in the first place, and came with a cashback from quidco as well.

forgotmyname

Change car on the current post office policy wont cost you anywhere near £178 will it?

In April take your business elsewhere.

You dont pay them £500, The yearly quote is £500 but you only have 5 months left or less.

Brian911

Similar story - different company. I took out a policy with echoice on 14/7/2012 for 2001 Audi a4 2.5 tdi and paid £178 (I am older and have lots of NCB) a very good price - yes. I then changed my car in early Oct 2012 for an 2006 Audi A4 3.0tdi - very roughly same car only 6 years younger. Went online to eChoice to do change of car and was quoted £164. When I go online to price comparison sites I can get new policy from lots of companies for ~ £230. Decided that even though the saving was marginal (since I only got £85 back from eChoice when I cancelled) I would cancel and take out new policy with Privilege for £224.

If I had checked this forum before I took out the eChoice policy I would certainly have paid the extra £10-£20 for another company.

dalesrider

How do you pay for your policy?
One off payment....
Or monthly.

If its monthly then odds on you have taken out a loan to pay the policy.
So you come to cancel and as per normal you only get % back. At a guess 50% max.
But you still owe more than that on your loan.
Hence the large payoff.

Moral NEVER PAY MONTHLY.....

whatmichaelsays

Lou101 wrote: »

I've been told by the Post Office that this is all noted in the documentation sent out and I'm sure it is, but who reads that?

DING DING DING DING DING! I was waiting for that to come up.

I can't believe, in this day and age, that people don't read what they are signing up to.

Ultimately, whether you want to or not, it is in your interests to read the terms of the agreement you sign up to and challenge them in the agreed cooling-off period if necessary (ie, by cancelling the policy then).

forgotmyname

whatmichaelsays wrote: »

DING DING DING DING DING! I was waiting for that to come up.
.

That post was LAST YEAR :rotfl:

whatmichaelsays

forgotmyname wrote: »

That post was LAST YEAR :rotfl:

It's been a long day

forgotmyname

After a December to October workday you deserve 5 minutes off

Have a cuppa and goto the toilet then get back to work.:)

MadamGeneva

I have requested my insurance company suspend my motor policy with a downgrade to 3rd party fire and theft as I have taken the car off the road for the winter. They want written evidence from DVLA of SORN status despite this being available online via the DVLA website.

Why do they need evidence of SORN anyway? Even DVLA expressed surprise! I've asked for an explanation from the company concerned but am not holding my breath. Is this a delaying tactic to reduce any refund due?

hugoshavez

MadamGeneva wrote: »

I have requested my insurance company suspend my motor policy with a downgrade to 3rd party fire and theft

Suspend or downgrade? Which is it?