Recently paid 1yr Insurance - But Failed MOT 2 months later

agrinnall

Iceweasel wrote: »

A daily pro-rata basis????

So, according to post #19 if I cancel a policy after say 21 days then I will get back 344/365ths of the premium?

If that was the case there would be no sense in having such a thing in existence as short term insurance.

I reckon that what would happen is that they would calculate the premium for a 21 day policy, subtract that from the annual premium I had paid and then refund me the difference, minus a £25 or £50 'service' charge.

Which is what I said in my post: "less charges".

Iceweasel

agrinnall wrote: »

Which is what I said in my post: "less charges".

Not quite - I'm pretty sure that a 21 day policy (or any similar short term policy) will be MUCH more expensive that 21/365th of an annual policy.

The stumbling block is the 'pro-rata' bit - and of course what the charges are.

agrinnall

Iceweasel wrote: »

Not quite - I'm pretty sure that a 21 day policy (or any similar short term policy) will be MUCH more expensive that 21/365th of an annual policy.

The stumbling block is the 'pro-rata' bit - and of course what the charges are.

And I'm sure you're right, but as both the OP and myself are only referring to annual policies I'm not sure where sort term ones come into the picture. I've never needed one so I've no idea whether the cost is greater than a cancelled annual policy plus charges.

Rolandtheroadie

agrinnall wrote: »

And I'm sure you're right, but as both the OP and myself are only referring to annual policies I'm not sure where sort term ones come into the picture. I've never needed one so I've no idea whether the cost is greater than a cancelled annual policy plus charges.

It comes into the picture because you've paid the policy for the year, but now, it's been a short term they've covered you for.
When it happened to me is that I paid the policy in full, but changed vehicle.
My current insurer wouldn't insure me for the new one, so I had no option but to cancel.
They then reassessed my premium based on what a short term policy would have cost. Then they added the cancellation fee, and their admin fee.
Conveniently, it cost the same as the whole policy would have cost. So they gave me a pro rata refund based on this new figure. £0.

Iceweasel

agrinnall wrote: »

And I'm sure you're right, but as both the OP and myself are only referring to annual policies I'm not sure where sort term ones come into the picture. I've never needed one so I've no idea whether the cost is greater than a cancelled annual policy plus charges.

You have misunderstood this I think.

If the OP cancels now, he will have been deemed to have had a short term 2 month policy, not an annual policy.

The OP paid for a full 12 months.

He is cancelling after 2 months - he will NOT get back 10/12ths of the annual premium minus charges.

He will get back the difference between a 12 months policy and a short term 2 month policy, minus charges.

There may not be much left to refund.

As I said in an earlier post, if you could get back 10/12ths of an annual policy then no-one would bother taking out short term insurance, would they.

Rolandtheroadie's example is exactly how it works.

agrinnall

Well, maybe the OP's policy and yours work that way, but I've quoted the cancellation clause from my own policy which is quite clear that it works in the way I've described.

Iceweasel

agrinnall wrote: »

Well, maybe the OP's policy and yours work that way, but I've quoted the cancellation clause from my own policy which is quite clear that it works in the way I've described.

OK - so if you're right, anyone wanting a short term policy for say 2 months would be nuts to take out a 2 month policy.

They would be far better off to take out a full 12 month policy and then cancel it after 2 months for a pro-rata refund of the time remaining. (minus charges of course)

If I were you I would be asking my insurance company a hypothetical question along the lines of 'If I cancel my policy now, how much of a refund would I get?'

Purely out of interest, I'll be asking that question of my insurers as I have to contact them soon anyway regards changing my car.

Anyhow for now we must agree to differ. I have experience of this situation in the past and I know what happened then.

I sincerely hope that I am out of date, and you are correct as that would be a change for the better.

EdGasket

motorguy wrote: »

+1

I've seen many cars go to a scrapyard and then be sold on and put back on the road.

As you say, bad idea.

The OP could just hang onto the car for the term of the insurance and earn the NCB. Would have to sorn it though if tax were due.

agrinnall

Iceweasel wrote: »

I sincerely hope that I am out of date, and you are correct as that would be a change for the better.

As it happens I plan to change my car in the near future and I may well end up cancelling the insurance if it makes financial sense so we can see what happens in real life. It's after 4 months rather then 2 but I can't see anything in my policy to suggest the process would be any different.

I actually did cancel a household contents policy after 2 and a bit months recently - premium paid for policy to start on 25/06 was £89.42, refund after cancellation on 04/09 was £72.08 - that's 71 days cover, and the refund was almost exactly 89.42*(365-71/365). Not even a charge levied, although that may be because I'd taken out another policy on my new home (buildings and contents) with them.

Iceweasel

Cancelling and then starting a new policy may well give a different result than leaving the company for a competitor.

But let's report back once we have actually done it.

As an aside isn't it refreshing to have a difference of opinion with a forum member (or 2) which doesn't degenerate into a point scoring slagging match as so many threads seem to have done of late.

:beer: