Car insurance cancellation con.....!!!!!

Parisien

I decided to cancel my Lancaster insurance for a 2nd car, fee was £302 including breakdown cover. The policy was in force for 7 months.

After a raft of deductions and penalties, how much do you think I got back with 5 months left on it?

£0

Yup a big fat nadda, indeed if he enforced the actual cancellation clause I would have owed them £15.

This is yet more sharp practice from insurance companies. When will the regulator call them to heel?

:mad:

k3lvc

And the T&C's you agreed to when you entered the contract were ??

Parisien

Doesn't matter.....ever heard of unfair contracts/clauses/conditions?

motorguy

Parisien wrote: »

I decided to cancel my Lancaster insurance for a 2nd car, fee was £302 including breakdown cover. The policy was in force for 7 months.

After a raft of deductions and penalties, how much do you think I got back with 5 months left on it?

£0

Yup a big fat nadda, indeed if he enforced the actual cancellation clause I would have owed them £15.

This is yet more sharp practice from insurance companies. When will the regulator call them to heel?

:mad:

You entered an agreement for 12 months insurance for a particular price. You decided to cancel that agreement.

You dont pay insurance on a per month basis, you pay for a years cover, which you terminated part way through.

If you didnt like the T's & C's you shouldnt have taken up on the insurance.

InsideInsurance

Parisien wrote: »

When will the regulator call them to heel?

When they find people that arent playing by the rules.

Regulator reviews items that are trending as complaints both to insurers and the ombudsman. It then investigates those where there is a trend of complaints.

A former client was asked by the FSA to justify its £50 cancellation fee. It submitted is justifications and calculations and was accepted as being reasonable.

Going via a broker you may find you end up paying two fees, one to the insurer and one to the broker

Johno100

OP, it is not clear from your post if you paid the premium in full at the inception of the policy or you are paying monthly direct debit, so it is hard to comment.

However, I understood that the historic policy of insurers charging short term cancellation rates e.g. 50% refund after 3 months and no refund after 6 months of cover had been outlawed by regulators and they could only charge on a pro-rata basis plus an admin fee.

motorguy

Parisien wrote: »

Doesn't matter.....ever heard of unfair contracts/clauses/conditions?

Yes, there was clearly a penalty clause for you terminating early.

motorguy

Johno100 wrote: »

OP, it is not clear from your post if you paid the premium in full at the inception of the policy or you are paying monthly direct debit, so it is hard to comment.

However, I understood that the historic policy of insurers charging short term cancellation rates e.g. 50% refund after 3 months and no refund after 6 months of cover had been outlawed by regulators and they could only charge on a pro-rata basis plus an admin fee.

Depends on the admin fee doesnt it? It could well be 7 months plus a few days through the policy, which means only four full months remaining, which means there'd only have been £100 due back tops anyway. Wouldnt take much in fees to wipe that out

Parisien

My point is, is it really fair...........when they add up the charges/penalties, they come to 1/2 the premium.........isn't just their way of not refunding?


In the past there was always a decent/pro rata proportion being handed back, now nothing.

motorguy

Parisien wrote: »

My point is, is it really fair...........when they add up the charges/penalties, they come to 1/2 the premium.........isn't just their way of not refunding?


In the past there was always a decent/pro rata proportion being handed back, now nothing.

It was never decent (in my driving lifetime anyway) - from memory once you got past 8 months you got nothing back.

Now they just use fees to make sure you get nothing back.

Realistically though, everyone goes for the cheapest insurance and the way insurance companies recoup some of that money they would otherwise make is by charging heavily for policy changes, interest rates on payments and cancellation charges.

20 years ago you'd have paid £500 for the policy in the first place, and maybe got £200 back when cancelling early.

It does seem we cant have our cake AND eat it - cheapest policies AND most generous terms.

InsideInsurance

Parisien wrote: »

My point is, is it really fair...........when they add up the charges/penalties, they come to 1/2 the premium.........isn't just their way of not refunding?


In the past there was always a decent/pro rata proportion being handed back, now nothing.

Who judges fair?

Making some assumptions naturally..... if you bought through an aggregator they've paid confused.com £75 for your years policy. Why shouldnt you refund 50% of it because you've chosen to renege on half of the policy you bought? They dont get any refund from the insurer on the LE cover you bought through them so why should you?

Ultimately there are two choices, either the person thats caused the loss foots the bill or it goes down as a general operating expense and thus everyone pays a proportion of it.

The regulators at the moment are of the mind set that it is fairer that those that cause a cost pay it rather than blanket increasing everyones premiums.