Paying to end car insurance

andyg1979

My wife sold her car so we called 1st Central to cancel her policy after 10 months and I was expecting a small refund as we paid up front.

Instead we are having to pay on top of this to end the insurance, which seems excessive to me, is this normal?

InsideInsurance

There is often a cancellation charge for terminating a policy early. Likewise insurance premiums are not "consumed" in a linea fashion and so you dont always get a straight forward pro-rataed refund. Finally, many add ons generate no refund if they are cancelled after 14 days.

Some insurers and brokers will cap the total cost at the original purchase price so you wont pay more even if you cancel early. Others apply the terms as per your policy book/ documents and so early termination can be more expensive than letting it run

DCFC79

Should have checked what would happen re the insurance if you sold the car.

Archergirl

What would happen if you just let it run out?

forgotmyname

Your insuring a car that someone else maybe driving.

If they use it for illegal deeds then the police could be knocking on your door. You claim innocence. Then they find you still have it insured.

Why not have a couple of hours in the cells whilst we check your details.

Old thread dragged up by someone with a pet hate for 1st central it seems.

One of many OLD threads dragged up by them.

username aerogazzo... in case they get deleted.

thenudeone

Old thread but so what!

Offering short term insurance is more risky and so more expensive. With nearly all types of insurance, stability always equals less risk.

If insurance companies allowed a full pro-rata refund of an annual policy cancelled part way through, they would effectively be allowing people to buy (more risky) short-term insurance but at the same monthly price as a (less risky) annual policy. To mitigate against this, there is usually an administration charge if policies are cancelled. This charge can be more than the remaining premium, meaning more to pay.

You MUST cancel insurance once you sell a car. If the next owner / driver isn't insured and has an at fault accident, your insurance company will have to pay out any damages, under the Road Traffic Act. Your insurers will then come after you for the money, because they have only had to pay out because you have failed to comply with a policy condition to notify them of any material changes to the insurance. The fact that you no longer own the vehicle is clearly a material change.

lisyloo

What would happen if you just let it run out?

Worst case your insurer is forced by law to pay out a claim they shouldn't have paid out and then sue you in the civil courts to recover a large sum.
In some cases insurers are forced by the Road Traffic Act to pay out.

You really should cancel the insurance if you sell a car.

The only time would be safe to let it run out would be if you car was scrapped. Probably then you should still inform the insurer but the chances of it being in a claim if it's been destroyed are pretty much nil,but even then you need to make sure it actually happens (these days you get a certificate of destruction).