car insurance cancellation rip off?!

forever_skint

I took out a car insurance policy last August for £274 and paid 2 months as a deposit (£60 ish). At the end of February I sold the car it was for and no longer needed the policy. I called the Company and explained the situation. They told me I had to pay another months premiums and a £35 cancellation fee. I asked them about the deposit I had paid and told them that this should cover the charges. They said it wouldn't and that the deposit is not relevant as it comes in during the last 2 months of the policy i.e June and July. Feeling quite cross about this, I cancelled my direct debit.

Today I received a letter saying that they required the months payment, a £25 charge for a returned direct debit and a default notice not to mention a cancellation charge of £35 all within 14 days. Can anyone tell me where I stand with this or do I really have to pay £87 to cancel an insurance policy that only had £79 left to pay on it???!!!

Mrs_B_12

Check your policy documents. There are fees like this on mine and they are all there clearly marked.

Glad

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 [EMAIL="abuse@moneysavingexpert.com"]!!!!!![/EMAIL].

lisyloo

You will have to pay the £35 admin fee.
This is a fee for their administration costs and would have been in the policy documentation sent to you up front.

You will have to pay the fee for the returned direct debit.
You cannot unilaterally decide simply to walk away from this contract. It's a legal contract that you agreed to.
Cancelling the direct debit was a little foolish (sorry) and has incurred them costs which you will now have to pay.

I don't understand why you have to pay another months premium.
What is this for?
Is this to give them one months notice?
Please can you explain further.

Also what happens to the deposit?
If you cancelled and didn't use the insurance in the last 2 months then I would expect you to get the deposit back (assuming you've paid the other charges).

Anon

lisyloo wrote: »

I don't understand why you have to pay another months premium.
What is this for?
Is this to give them one months notice?
Please can you explain further.

I don't know about this specific case (as the insurer isn't mentioned) but Lloyds TSB (Churchill) charge a month's premium to cancel your insurance (no admin fee though).

Anon