Car Insurance Cancellation fee

kaitaz

My father decided he is too old to drive anymore, sold his car and today tried to cancel his insurance. He was told he would have to pay a £55 cancellation fee. He has had the insurance since October and paid for it in full. He thought he would be entitled to some money back for the unused months but was told that they only insure for 12 months and a cancellation fee would be owed. He then said that he would let the insurance run its course and was told he could not as he no longer owns a car and cannot be insured on nothing.
I could understand if he had paid in installments but it only cost £99 and he paid in full. I have never come across this with car insurance before its usually very straightforward to cancel. Can someone confirm if this is right or have any advice about where he stands on this matter. The insurer is Buget by the way.

tom188

It is becoming more and more usual. These costs used to be included in the premium loading but with the advent of no frills cheapest quote insurance, where there is next to no profit margin, any non standard services such as cancellation or changing details are charged for.

More expensive quotes may not include these charges, but the fact is they have already been taken into account when you are given a price.

keithz987

I think that the person your father spoke to is confused. Is this Budget Insurance? It seems that the refund due is less than £55 and so, after the £55 cancellation fee your father owes them some money, in theory. However, this will not be charged i.e. your father will not get a refund nor does he owe them any money.
See this link:

http://www.thisismoney.co.uk/ask-an-expert/insurance/article.html?in_article_id=418499&in_page_id=136