car insurance penalties

griff11

Hi new to this so sorry if i've posted in the wrong place or am asking a stupid question. I was late paying an instalment of car insurance so when i rang the firm (amber credit) to make my late payment by card I was told i would have to pay an admin fee of £15 to which i refused (i did'nt have it) The credit firm then duly said i would be in breach of contract and would cancel my insurance in 30 days if i did'nt pay up, which they did. Then their debt department threatened me with court action if i did'nt pay the rest of the insurance premium (about £150) even though i did not have insurance i settled to do this at £50 amonth, they now want to charge me a further £98 admin fee or they will see me in court, can they do this? or more importantly what can i do?

Janusian

When you take a car insurance policy it usually will not cancel on a pro-rata basis (Time on cover basis if you will) during the first year, and in the case of some insurers beyond this.

If you had paid the full year up front, then cancelled after a month you would get 70% of the premium back, through to a cancellation after 8 months when you get nothing back.

With finance, especially where arranged through a third party company, this is still the case. You have not signed up to a monthly insurance contract, you have signed up to an annual contract, paid monthly. Your policy document should outline the cancellation scale, and Amber will only be able to reclaim this proportion from the insurers, hence them coming after you for the balance.

It is a valid term, but they really should have explained this when you took the insurance out, and certainly when you cancelled.

griff11

Thanks for showing an intrest in this thread janusian and especially for explaining the cancelation scale but is it fair for this company to demand £98 for administering the cancelation? any views or comments would be greatfully recieved. Many thanks in advance griff.