Car Insurance Cancellation fees

bennybaby

Hello

I was hoping that someone may have a little bit of advice! I have car insurance that i pay monthly to Admiral on direct debit. i have not had any claims at all in the period that i have been with them. i want to cancel my insurance at the end of the month as i will no longer have a car and will not be getting another one. They want to charge a cancellation fee of £50 for doing so. i just wanted to double check from people in the know if this is perfectly normal or not? i have never cancelled mid policy before you see.

Thank you!

dunstonh

i just wanted to double check from people in the know if this is perfectly normal or not?

There are two main pricing methods.

1 - Higher premiums but no admin fees.
2 - Lower premiums but admin fees.

Admiral work on the latter basis (as do most nowadays).

InsideInsurance

Almost everyone chooses option 2 for two reasons:

a) People will switch insurers to save £1 and so the lower you can cut the headline price the more business you get and

b) Those without fees suffer negative selection where people wanting short term cover buy from them instead and then cancel after they've gotten their car from the police pound etc but the insurer is still stuck paying all the advertising fees to Google etc

Some would argue that there is also a c) which is that the regulator/ ombudsman think its fairer to adopt a "pay on use" basis rather than charging everyone extra to cover the "cost" those that make changes or cancel early incurs. Others think insurers dont care about fairness.

rs65

bennybaby wrote: »

i just wanted to double check from people in the know if this is perfectly normal or not? i have never cancelled mid policy before you see.

Perfectly normal. Check your docs to make sure £50 is correct.

Cancellation will incur administration charges that are payable to EUI Limited for the cost of arranging and handling your policy. Details of these charges are given in ‘Your Agreement with EUI Limited’, available online and included with your documents issued at inception and renewal.

bennybaby

Thank you all for your replies, greatly appreciated!