Cancelling car insurance

hedgewitch_2

I recently sold my car and cancelled the insurance on it, which still had 7 months to go. The insurers tell me that the cancellation fee of £35 is more than the insurance refund of £29, so technically I owe them money, but they will most generously waive this. However, the annual insurance was £179, so 7 months insurance cost over £100. Are they allowed to do this? Has anyone else had the same experience? And if it is right, why would anyone bother to cancel a policy? Anyone out there who understands car insurance, please advise me. Joan

ioscorpio

Unless you are NOT going to buy another car you are better off letting the policy run, otherwise it will affect your no claims bonus

dzug

Yes - it's normal for a short period policy to cost more, pro rata, then a full year one.

The best you can hope for is they'll make a full allowance against a future policy.

brazilianwax

Cancellation charges are often (if not always) front-loaded and not pro-rata.

The sliding scale should be shown on your documents.

I think you normally get about 70% back within the first 2 months or so, then it slides down to the point where cancelling gets you no refund at all within the last 3 months or something like that.

MarkyMarkD

There's no reason why they can't charge this. Most companies don't charge it in second and subsequent years of insurance, so it's mostly a penalty for those who switch policies every year.