Car Insurance Cancellation Fees

luken26

Hello Money Saving People

I have recently phoned up to cancel my Car Insurance as I have found it substantially cheaper elsewhere. However I was shocked to find out that on top of the £50 cancellation fee they also want to charge me an additional £70...

They say the £70 is due to days remaining on my policy and a discount that was given to me when I took out the policy, is this fair? I don't see why I should be charged £120 to cancel an insurance policy!

If anyone needs it I can get a full breakdown of these costs from them

Thanks

InsideInsurance

You need to get the full breakdown of costs and compare them to what your policy terms say about the cost of cancellation to ensure they are correctly applying the terms you agreed to.

Car insurance is a year long policy and shouldnt be entered into lightly as the cost of exiting them can be substantial, particularly after the cooling off period. Why were you shopping around mid term anyway? How long is left on the contract?

stator

I'm not sure why there are two payments, perhaps one to the insurer and anothe to the broker? Anyway you'd have to check your T&C documents to see what's allowed

luken26

InsideInsurance wrote: »

You need to get the full breakdown of costs and compare them to what your policy terms say about the cost of cancellation to ensure they are correctly applying the terms you agreed to.

Car insurance is a year long policy and shouldnt be entered into lightly as the cost of exiting them can be substantial, particularly after the cooling off period. Why were you shopping around mid term anyway? How long is left on the contract?

My circumstances have changed, points that I previously had have dropped off and a previous driving conviction I had has now been over the 5 year mark and new insurers are willing to give me substantial savings where as my current provider will not budge on price.

I am currently paying £80 a month, where as I can get it for about £22 a month elsewhere, saving me around £60 a month, its beneficial to do that and still pay the £120 cancellation fee they are asking for, however I wanted to know whether it is fair of them to charge this.

trukdiver

stator wrote: »

I'm not sure why there are two payments, perhaps one to the insurer and anothe to the broker? Anyway you'd have to check your T&C documents to see what's allowed

One would be the standard cancellation fee and the other may be for "extras" which were charged annually but paid for monthly? The OP needs to get a breakdown of the charges...

ACG

Im with Hastings and as I knew I may end up cancelling it when my new car gets delivered (tomorrow ) it was a question I asked.

Their stance was they would refund me pro rata but charge a £45 admin fee.

With anything like this, its always worth checking.

Maybe write a complaint on their facebook/twitter page? Also have a look on this forum, some of the insurers have reps on here - put their name in this post and you might get somewhere with it? It does seem a little unfair on the face of it.

dunstonh

They say the £70 is due to days remaining on my policy and a discount that was given to me when I took out the policy, is this fair? I don't see why I should be charged £120 to cancel an insurance policy!

They are not charging you £120 to cancel. They are saying that the discount they offered you for staying with them for the policy term no longer applies as you are not staying with them for the policy term.

however I wanted to know whether it is fair of them to charge this.

There is no issue with cancellation charges or reclaiming special offer terms you lose by not complying with the terms of the special offer as long as they are documented and fair. Many years ago, the FOS published a case of £50 cancellation charge as being fair. The main thing is whether it is published and reasonable. Reasonable is perception but a general view is that if the FOS thought £50 was reasonable back then, chances are it would do now.

There would also be expected to be some premium payable. It should be relatively pro-rata but not exact (apart from in the cancellation rights period where it should reflect exactly the time on cover plus admin charge). e.g. if you cancelled after month 8, the firm could reasonably charge you to the equivalent of the end of month 9. These terms are normally published.

If the terms of your discount stated that you had to be with them for the whole year or you lose the discount then that sounds fair. However, the terms should be published for you to verify them.

Take a read of your documentation and see what it says.

dacouch

The joy of cancelling a Policy with Swinton

DRB7

My daughter is in the process of changing her car and I naively assumed we'd just contact current insurer and pay the difference between current and new car. I'd expected (albeit reluctantly) an admin fee but was quite surprised when they wouldn't even quote for new car but still expect a fee of £53 to leave. I feel that it's a no-win situation and am certainly going to negotiate - just wondering if anyone else has had a similar experience? plenty of other companies have quoted and they seem reasonable - it's not exactly a Ferrari!

InsideInsurance

DRB7 wrote: »

My daughter is in the process of changing her car and I naively assumed we'd just contact current insurer and pay the difference between current and new car. I'd expected (albeit reluctantly) an admin fee but was quite surprised when they wouldn't even quote for new car but still expect a fee of £53 to leave. I feel that it's a no-win situation and am certainly going to negotiate - just wondering if anyone else has had a similar experience? plenty of other companies have quoted and they seem reasonable - it's not exactly a Ferrari!

Is it an insurer or broker?

If its an insurer its fairly simple, you can do a quote online and see if they bring back a price.

If its a broker or other form of intermediary its more complex as you need to ensure its the same insurer/ underwriter that is quoting.

With a moderate amount of brokers they will waive or reduce the cancellation fee if you take out a new policy with another insurer on their panel

forgotmyname

Lots of threads where people buy the car and then find the insurer want more money or much less often wont cover it at all.

I am afraid she made a big mistake of not asking them first. If her current insurer wont cover it them there is nothing else to do but cancel it and take out a new policy.