Car Insurance Cancelation Charges Unknown?

Monzo007

I am dealing with Ecar car insurance and now need to cancel my policy due to financial circumstances.

I have paid for the insurance up front, used 3 months of 12. I have not had any claims, and I asked them for how much I will get back.

They have stated that they will keep a proportion which I have used (i.e. 3 months) and they also state I will be charged...

"a deduction for our costs attributed in concluding your policy, administering your contract up until the effective cancellation date and processing the cancellation "

But they will not tell me what these costs are, until I cancel my policy. I’m sure there must be a law someone that forces them to tell me what these other charges will be before they implement them, though I am having a hard time finding this information.

The documents they send with the policy and their website don’t seem to state what this charges are either.

I don’t want to cancel my policy to find I get £10 refunded for 9 months of unused insurance. If this was the case I may as well keep the policy for the extra year of no claims discount.

Can anyone point me in the right direction to find regulations on insurance cancelation charges (surely they have to tell me in advance of me cancelling the policy)

Thanks

InsideInsurance

It states in their terms of business that the cancellation charge is £75 plus the premium for legal expenses is non-refundable outside of the cooling off period (fairly normal)

Monzo007

Thanks for reply.

I have found that £75 is right, but along with the other charges there is no point in even cancelling the policy.

I just wanted to know this upfront without having to fight to get an answer.

Sigh, well I guess big business needs the money more than me

InsideInsurance

Unfortunately you bought an annual product and so early termination results in costs.

Some insurers do do a rolling monthly policy and so have no cancellation costs (though typically higher monthly premiums) which may be more suitable for you if you are likely to want less than 12 months cover

dunstonh

I have found that £75 is right, but along with the other charges there is no point in even cancelling the policy.

That can often be the case. Explicit charging is favoured by many, including the regulator. This does lead to the situation where small value amounts are involved where the charges can appear disproportionate to the premium. However, as everyone pays the same for those explicit costs, they are considered fairer. The old way was that the costs were put into the premium and everyone paid towards them every year whether they created admin takes or not and those paying higher premiums cross subsidised those paying lower premiums.