Car insurance RIP OFF !!!!!!!

pika79

Have just sold my car and so called Yes insurance to cancel my policy. The policy cost £498 and i have had it for 5 months and when cancelling i expected a cancellaation charge but when i called i was told i was being charged £213 for the insurance i have used, £35 cancellation charge and £185 shortfall for cancelling the insurance early so will get a refund of £65 !!!!!!!!!!!!!!!!!!! i was flabbergasted surely that cannot be correct. I looked at my policy and it does say that they will charge a shortfall dependant on the prices of the moment but this seems like an excessive amount of money ive basically paid most of the insurance money for less than 50% of the year ! Im gonna complain do i have a chance ? x

Horseunderwater

Oh dear - Were you getting another car to replace that one? If so the cheaper option would have been to change the car on the existing policy then at renewal get some better quotes. That's how I used to do it when I changed on a regular basis due to circumstances of running cars with a year's MOT at a time. Sometimes I'd get a reduction + £25 policy change and sometimes I'd have to pay a little more each month. But they used to let me have it in instalments - I'd get a revision letter telling me new amount for DD.

ACG

There is a reason why they do that... for the life of me i cant think what is is.

Thats not to say i agree with it in the slightest, what other industry could get away with charging you for stopping cover. I would put a complaint in anyway.

mikey72

Have a read of

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

whatmichaelsays

ACG wrote: »

There is a reason why they do that... for the life of me i cant think what is is.

Thats not to say i agree with it in the slightest, what other industry could get away with charging you for stopping cover. I would put a complaint in anyway.

Effectively, the insurer will base the premium on what it's rates for 'short-term' cover would be.

Using insurance for 6 months does not equate to a 50% refund - the cost of the insurance is front weighted to cover the cost of administration and setting up the policy. These costs are the same whether the customer insures for 1 month or 12.

ACG

Thats the one.
They have had over £200 (closer to £250 with the admin fee), it doesnt cost that much to set the policy up so if they cancel it they have still made a profit on that paticular policy.

mikey72

whatmichaelsays wrote: »

Effectively, the insurer will base the premium on what it's rates for 'short-term' cover would be.

Using insurance for 6 months does not equate to a 50% refund - the cost of the insurance is front weighted to cover the cost of administration and setting up the policy. These costs are the same whether the customer insures for 1 month or 12.

The FOS don't agree with short term rates.
They'll allow the £35 cancellation fee, then roughly pro rata for the premium, as the link above.

An offical written complaint to the insurer, then refer it to the FOS if they don't improve the offer.

dunstonh

The FOS don't agree with short term rates.

They dont like short term rates but they do allow the policy refund to more weighted at the start (i.e. less pro rata) than they do at the end as they know the cost is higher in the start of the policy year than at the end.

The policy cost £498 and i have had it for 5 months and when cancelling i expected a cancellaation charge but when i called i was told i was being charged £213 for the insurance i have used, £35 cancellation charge and £185 shortfall for cancelling the insurance early so will get a refund of £65 !!!!!!!!!!!!!!!!!!!

For 5 months you would expect them to charge around 6 months of premium as a guide. The £35 is reasonable. The £185 is taking the mick.

DCFC79

Why did you not check this out before you sold the car ?

Give it a shot complaining.

pika79

DCFC79 wrote: »

Why did you not check this out before you sold the car ?

Give it a shot complaining.

I expected the cancellation charge of around about 50 quid, i expected to get charged a higher premium also but thought i would get refunded around 150-200 ! We had 2 cars and have sold this one and kept the other as it just wasnt economical to use too with the fuel prices as they are. I checked our other policy and there is no mention of shorfall premium, it never even entered my head this would be the case thats why i did not check. I already searched for fos and have seen their take on it so had decided to write a letter of complaint but just wondered if any of you had experienced it before as i have not.

pika79

DCFC79 wrote: »

Why did you not check this out before you sold the car ?

Give it a shot complaining.

I expected the cancellation charge of around about 50 quid, i expected to get charged a higher premium also but thought i would get refunded around 150-200 ! We had 2 cars and have sold this one and kept the other as it just wasnt economical to use too with the fuel prices as they are. I checked our other policy and there is no mention of shorfall premium, it never even entered my head this would be the case thats why i did not check. I already searched for fos and have seen their take on it so had decided to write a letter of complaint but just wondered if any of you had experienced it before as i have not.