Cancelling insurance

Guest101

Can someone please explain to me:

I pay monthly by direct debit for my insurance, car is finally being sold (the saga ends...) but Flux Direct want to charge me £102 for the privelage!

I presume if i just cancel my direct debit then this will mean i have a 'cancelled' policy on my 'record', as opposed to a terminated policy.

Can someone explain the ramifications?

If i indeed owe this money, i will offer to pay by instalments, but holy cow £100 just to cancel!

DUTR

Guest101 wrote: »

Can someone please explain to me:

I pay monthly by direct debit for my insurance, car is finally being sold (the saga ends...) but Flux Direct want to charge me £102 for the privelage!

I presume if i just cancel my direct debit then this will mean i have a 'cancelled' policy on my 'record', as opposed to a terminated policy.

Can someone explain the ramifications?

If i indeed owe this money, i will offer to pay by instalments, but holy cow £100 just to cancel!

When you take out a policy in installments, you have agreed to a credit agreement for the full policy amount.
Don't just cancel the DD without having paid the balance in full.
Chances are the balance will not be pro rata without extra admin and cancellation charges.
EG if you had six months to run, the cancellation balance maybe more than 6 months money.

Ianwzzz

Yes it's so wrong that they can charge you this amount but It probably says so in the small print so you will probably have to pay it.

I tried to cancel my policy when I changed my car and they wanted £480 to cancel as it was on a multi car policy, so I had to take the new car insurance out with them which was £140 dearer than I could get elsewhere.

McKneff

Just cancelling the dd does not cancel the policy. You have to do this yourself with your insurance company.
You would still owe the money and they will still chase you for it.


I don't think they will allow you to pay the cancellation fee in instalments either.

Quentin

Guest101 wrote: »

Can someone explain the ramifications?

If i indeed owe this money, i will offer to pay by instalments, but holy cow £100 just to cancel!

A cancelled policy on your record is generally considered bad news.


It has to be declared to most insurers for ever more and many simply won't quote you. Expect a higher premium to get cover.


If you cancel your DD all that does is top the method of payment.


They will pursue you for the debt just like any other unpaid bill - all the way to court/debt collectors etc.


And although it may not be important most insurers won't issue you with your proof of NCD until your account is settled.

Faith177

This would be due to your cancellation fee and also a time on risk element.

You'll need to check your documents but the cancellation fee could be anything up to £75

If the amount you have paid on your direct debit doesn't cover the time on risk charge this will also need to be paid.

It might be an idea to get a full breakdown from your insurer

InsideInsurance

Guest101 wrote: »

I presume if i just cancel my direct debit then this will mean i have a 'cancelled' policy on my 'record', as opposed to a terminated policy.

Can someone explain the ramifications?

No, then you have failed to pay and the insurance is then terminated for non-payment and the debt, often plus failed payment fees, is then transferred to a debt collector. If they will actually go as far as a CCJ or just sending harassing letters for a while depends on the provider

In the meantime you must declare you've had insurance terminated for non-payment to all current and future insurers for the rest of your life. If you give a good sob story some may take you on but generally you will be limited to the sub prime providers who take on people like your and known fraudsters etc

Challenge them to provide a breakdown of the cost and cross compare it to what your policy documents say it should be. As you've bought from a broker where you've been paying by installments then there are possibly 3 companies fees making up that amount (insurer, broker and finance provider)

Guest101

McKneff wrote: »

Just cancelling the dd does not cancel the policy. You have to do this yourself with your insurance company.
You would still owe the money and they will still chase you for it.


I don't think they will allow you to pay the cancellation fee in instalments either.

Thanks everyone.

She did actually say they could do instalments - like any debt i guess - being a credit agreement as DUTR pointed out.

Thanks everyone

AdrianC

There's one thing that you seem to have misunderstood. When you pay £x/month for insurance, you aren't buying one month of insurance at a time. You're buying a year's policy, but paying for it in chunks.

Guest101

AdrianC wrote: »

There's one thing that you seem to have misunderstood. When you pay £x/month for insurance, you aren't buying one month of insurance at a time. You're buying a year's policy, but paying for it in chunks.

No I understand that. I've purchased insurance for 12 months, for a total of £600 (roughly) but taken a credit agreement to pay for it, which charges interest. The interest is less than £100 for the year, so pro rata'd less than £10 per month.

So the £100 seems excessive, given that the 'cost' to them seems to disappear. And even if the credit provider wants their full interest payment, which presumebly a portion of they've had already, that doesn't equal £100 at any point.

macman

What does the policy say the charges are for early termination? You may think £100 is OTT, but if that's what you agreed, then that what you are liable for.
How many months still to run?