Excessive cancellation fees! So if the banks are ...

sarahe

having to pay back excessive bank charges what about Insurance companies???

Hello


My car failed it's MOT - I decided not to get it mended and have taken it to a scrap yard. I pay my insurance annually in January and as I have 9 years no claims/ cheap car etc it is fairly cheap insurance.

I have just been told (yes it is on the certificate of insurance on the back) that it will cost me £45 to cancel it! If I suspend the insurance I don't get charged £45 but it will just run out.

I will probably get back £50 minus the cancellation fee so a fiver . Surely that's excessive? Who can I write to first?

maow425

I moved house so I called my insurance company (Yes Insurance) and was told it would be £15 to change my address details. And the price would go up as well because it was a higher risk area.

maow425

Conor_3

sarahe wrote: »

having to pay back excessive bank charges what about Insurance companies???

Hello


My car failed it's MOT - I decided not to get it mended and have taken it to a scrap yard. I pay my insurance annually in January and as I have 9 years no claims/ cheap car etc it is fairly cheap insurance.

I have just been told (yes it is on the certificate of insurance on the back) that it will cost me £45 to cancel it! If I suspend the insurance I don't get charged £45 but it will just run out.

I will probably get back £50 minus the cancellation fee so a fiver . Surely that's excessive? Who can I write to first?

It's a hard one as some of the cost is what the Underwriters charge them. when you take out insurance, it's not the insurance company that insure you but underwriters. They have their own fees which they'll charge the insurance company and the insurance company have admin fees on top.

MarkyMarkD

Your post is a bit misleading and confusing Conor but I know what you mean.

Either you take out insurance direct from an insurer, in which case there's only one party involved, or you take it from a broker who then gets the insurance from either an insurance company or a Lloyds underwriter.

In the second situation, because there are more parties involved, there is the possibility of greater penalties for early cancellation.

As long as a pro-rata refund is given, the Financial Ombudsman Service doesn't see early cancellation penalties as wrong per se. £45 is not excessive. The amount of profit made on an insurance policy is next to nothing, even if the policy runs for its entire term. The admin costs for setting the policy up are the same whether the policy runs for its entire term or not. Cancelling early causes more admin cost for the insurer than if the policy ran to its natural conclusion.