Over £300 to cancel car insurance policy?

reado_2

I have just sold my car to WeBuyAnyCar.com because it failed the MOT and the costs to repair were more than what the car is worth. I don't plan to insure another vehicle because I have been given a company car.

I contacted my current insurance provider (1st Central) last night who told me there was a £50 cancellation fee, plus the remaining balance, which comes to a total cost of about £350.

Can they really do this, even though I have never claimed on the policy?

According to their website, there is a £50 charge for cancelling mid-term but the part about outstanding charges is not displayed on the website and you have to dig deep into their documentation to find the bit about the outstanding fees, and even then that section is not cross-referenced anywhere on the "cancelling your policy" page, which makes me wonder if they are even allowed to do this?

FlameCloud

Provided that you havent claimed, the refund should be roughly prorated across the years premium, so you will need to work out what % £350 is and then compare it to how long you've had the policy for.

Then you need to deduct the cancellation charges and they may not refund any additional products such as legal expenses or breakdown cover.

sithemadmonkey

OP, have you made any 'fault' claims in this policy year? If so (and as FlameCloud has said) then the insurer will have stated in their T&Cs that the full year's premium is payable. If you've been paying by instalments then the rest of those instalments (minus any future interest) will be payable.

If you haven't made any fault claims (i.e. claims where the money paid out can't be recovered from anywhere else), then you should only have to pay pro-rata for the cover you've had, minus any cancellation charges. Bear in mind any extras (legal cover, key cover etc) may not give any refund for cancellation.

reado_2

Thanks for your replies. I have had an email from 1st Central with a breakdown of what's left to pay, as follows. Bear in mind I have never made a claim or had an instance where they have had to pay money to me.

I can confirm your policy has been cancelled with effect from the 27th January 2013. Originally the amount due for the cancellation was £335.08, however as per your telephone conversation with my colleague earlier today, it was agreed that the £30 default fee you were charged would be removed. The amount now due is £282.13.

As requested, Please find a detailed breakdown below of how this amount is calculated:

Total cost to you:

· Time on cover between 23/10/2013 – 27/01/2014: £44.42
· Cancellation fee: £50.00
· Interest charge for paying via direct debit: £31.71
· Administration fee for change of address on 18/12/2013: £30.00
· Set-up fee: £50.00
Ancillary products:
· Legal expenses cover: £30.00
· Hire care cover: £29.00
· Personal Accident cover: £27.00
· Breakdown cover: £65.00

The set-up fee, administration fees and any ancillary products are incorporated into your premium, but unlike your time on cover, are not charged pro rata and are therefore fully payable in the event of cancellation.

Therefore the total cost to you is £357.13

Paid by you:

· Instalments: £75.00

Therefore the total paid by is you £75.00

We therefore subtract the total paid by you (£75.00) from the total cost to you (£357.13) leaving £282.13 outstanding to pay.

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Does all of this sound correct?

spacey2012

WOW, I have never seen such a lot load of add on expensive extras.

Send them an official complaint and ask them to send a deadlock letter so you can refer the charges to the FSA as they appears to be interest charges where no charge is due and several other discrepancy charges for services which will no longer be provided as part of the policy.
Make what you see as a reasonable offer, I would say £75

Quentin

reado wrote: »

Bear in mind I have never made a claim or had an instance where they have had to pay money to me.



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Does all of this sound correct?

If you had made a claim, or had a claim made against you then there would have been no refunbd at all.

Assuming you did sign up for the ancilliary products, then it looks correct.

reado_2

spacey2012 wrote: »

WOW, I have never seen such a lot load of add on expensive extras.

Send them an official complaint and ask them to send a deadlock letter so you can refer the charges to the FSA as they appears to be interest charges where no charge is due and several other discrepancy charges for services which will no longer be provided as part of the policy.
Make what you see as a reasonable offer, I would say £75

I see what you mean. I didn't understand the interest bit myself and wondered why this has been charged separate to the monthly figure.

This bit puzzles me:

"The set-up fee, administration fees and any ancillary products are incorporated into your premium, but unlike your time on cover, are not charged pro rata and are therefore fully payable in the event of cancellation."

This comes across as a bit of a sneaky tactic to keep you as a customer. It sounds like they're saying that they will keep all the charges that have accumulated over the life of the policy in a separate payment and if I decide to cancel (and I'm guessing not renewing falls into the same category) then they will say "OK, but you owe us £££ in charges and fees before you can leave us".

Does this sounds right?

Quentin

spacey2012 wrote: »

WOW, I have never seen such a lot load of add on expensive extras.

Send them an official complaint and ask them to send a deadlock letter so you can refer the charges to the FSA as they appears to be interest charges where no charge is due and several other discrepancy charges for services which will no longer be provided as part of the policy.
Make what you see as a reasonable offer, I would say £75

OP, you will be unaware that this poster is one of the reasons why we are warned to take care as "anyone can post here".

The FSA (when the Financial Services Authority, though now defunct) has never dealt with complaints from consimers. Spacey has repeatedly been told this.

If you feel you have grounds to complain over this, then you should follow the insurers complaints procedure.

If you are unhappy with the reply you get, then you can escalate to the Financial Ombudsman Service (FOS). (Again Spacey been repeatedly told this).

Spacey - the FSA is now the Food Standards Agency (which you have been repeatedly informed about too)

reado_2

Quentin wrote: »

If you had made a claim, or had a claim made against you then there would have been no refunbd at all.

Assuming you did sign up for the ancilliary products, then it looks correct.

Yes, I added those additional bits to my policy because I thought I was getting a good deal, but I have never had a claim and have 7 years NCD.

reado_2

Quentin wrote: »

OP, you will be unaware that this poster is one of the reasons why we are warned to take care as "anyone can post here".

The FSA (when the Financial Services Authority, though now defunct) has never dealt with complaints from consimers. Spacey has repeatedly been told this.

If you feel you have grounds to complain over this, then you should follow the insurers complaints procedure.

If you are unhappy with the reply you get, then you can escalate to the Financial Ombudsman Service (FOS). (Again Spacey been repeatedly told this).

Spacey - the FSA is now the Food Standards Agency (which you have been repeatedly informed about too)

lol, thanks Quentin. I will go down the complaints route with the insurer and see where that gets me. Thanks.

Quentin

reado wrote: »

I see what you mean. I didn't understand the interest bit myself and wondered why this has been charged separate to the monthly figure.

This bit puzzles me:

"The set-up fee, administration fees and any ancillary products are incorporated into your premium, but unlike your time on cover, are not charged pro rata and are therefore fully payable in the event of cancellation."

This comes across as a bit of a sneaky tactic to keep you as a customer. It sounds like they're saying that they will keep all the charges that have accumulated over the life of the policy in a separate payment and if I decide to cancel (and I'm guessing not renewing falls into the same category) then they will say "OK, but you owe us £££ in charges and fees before you can leave us".

Does this sounds right?

If you were paying in instalments then you will have a finance agreement covering the loan. This may have early termination penalties.

Your ancilliary products will state they are non refundable when you cancel (check the policy ts + cs).

But none of this precludes you from making a complaint over the charges, nor escalating to the FOS (which will be at no cost to you) for their adjudication.