insurance cancellation charges

tombon4675

recently changed home contents insurer(too expensive)-charge was i month premium-royal bank of scotland. checked with new insurer-cancellation charge £6. queried rbs about this said it was on policy and must pay up. told them am going to ombudsman and require written proof of how such a large cancellation charge is made up-no reply as yet. banks leave a nasty taste in my mouth:

gwinnie

Yikes ... I've been thinking of changing home contents mid-policy so this is something to be aware of..

marcellep

reply

I have never had any problems with cancelation charge when it comes to home insurance, I was with AA and they where ok when I moved house and left them mid term.

car insurance was the same and I was with NU direct @ that time

lisyloo

Cancellation charges seem to be becoming more common as well as automatic renewals.

Make sure you check the deal out properly when you start, end or change a policy.

dunstonh

£6 seems a very fair penalty.

Gibbonmaster

Not every insurer charges for cancellations or changes to policies.

When i switched my cover to M&S home insurance they actually refunded my previous cancellation charge in M&S vouchers! Apparently they can do this for everyone, and they don't charge if I want to cancel mid-term.

The thing is it doesn't really cost an insurance company to physically cancel a policy, it's just hitting enter on a keyboard.

MarkyMarkD

There's nothing at all unreasonable about mid-term cancellation charges.

Insurance is an annual contract. The premium you pay includes an element for the administration costs of setting up the policy, which includes advertising costs, staff costs, etc. If you cancel early, these costs don't go away - they are borne by the insurere but not recovered unless they charge a cancellation charge.

Effectively companies which don't charge are making customers who don't cancel mid-term subsidise those who do not. How's that fair?

raskazz

As others have mentioned - it's an annual contract. The cancellation terms would have been provided to you at inception, where you would be entitled to cancel without penalty within the 14 day 'cooling-off' period.

Caveat emptor.

m5dly

I thought I'd do a quick search about Insurance cancellation charges and see what came up, as I've just been stung!!

Elephant.co.uk has just charged me £45, yes £45 to cancel my policy. I'm lucky it still has a while to run, as cancelling it near the end of the policy would mean I would have had to pay them even more!!!

So MarkyMarkD I have to disagree!!

I'm gutted :mad:

MarkyMarkD

This is disclosed on their website:

Q: How do I cancel my policy?

A: To cancel your policy, please call us on 0870 040 6644. You will only be charged for the time you have been on cover, plus a £45 administration charge. You must return your certificate to the following address before we can cancel your policy: elephant.co.uk, Capital Tower, Greyfriars Road, Cardiff CF10 3AZ

So on what basis do you disagree, and to what?

I don't understand how you think it will cost more to cancel near the end of the policy.