Charged £260 to cancel a car insurance policy only two months in..

darkstryder360

Brief rundown.

Have a modified car so went with specialist modified car insurance.

The car is super unreliable and I am to sell it.

Buy another car as a runaround, it so happens the car is worth less than £750. Current insurer won't cover me due to the value of the vehicle.

So because the company will not cover me I have to cancel and look elsewhere.

I paid £540 for this policy in June/July and 2 months later when I want to cancel I am getting around £200 refunded.

Where is the rest of my money? Oh yeh "admin and pro rata fees".

Does this seem extortionate or is it just me? I left Admiral few months ago for £40.

[Deleted User]

darkstryder360 wrote: »

Brief rundown.

Have a modified car so went with specialist modified car insurance.

The car is super unreliable and I am to sell it.

Buy another car as a runaround, it so happens the car is worth less than £750. Current insurer won't cover me due to the value of the vehicle.

So because the company will not cover me I have to cancel and look elsewhere.

I paid £540 for this policy in June/July and 2 months later when I want to cancel I am getting around £200 refunded.

Where is the rest of my money? Oh yeh "admin and pro rata fees".

Does this seem extortionate or is it just me? I left Admiral few months ago for £40.

These reasons are the whole answer
Unless you asked at the time about cancellation fees and were given different figures?

darkstryder360

treboeth wrote: »

These reasons are the whole answer
Unless you asked at the time about cancellation fees and were given different figures?

So that is perfectly normal to be charged that much to cancel a policy? Can I not raise it as a complaint?

This is a smaller company taking advantage of the situation.

AdrianC

£540 - £200 = £240 not £260.
£540/12 = £45/mo. So £90 in pro-rata premium.
£240 "spent" less the £90 of premium "used" is £150 in cancellation costs.

How are they calculating that £150? They will tell you if you ask.
Were you paying the premium monthly? If so, there are finance costs included in that £540 which won't be refundable.
What do the policy docs you received when you bought the policy say about cancellation charges?

Johno100

I'd want a full breakdown of what is being charged.

I'd suspect that, as with most modified car policies, you are dealing with a broker and the underwriters are somebody entirely different, likely both are trying to charge you a cancellation fee.

worried_jim

I know I'm being paranoid but isn't the OP's user name a but too similar to DM101? Just sayin'......

BeenThroughItAll

worried_jim wrote: »

I know I'm being paranoid but isn't the OP's user name a but too similar to DM101? Just sayin'......

We have a winner.

darkstryder360

worried_jim wrote: »

I know I'm being paranoid but isn't the OP's user name a but too similar to DM101? Just sayin'......

Forgive my ignorance? And it's similar in the sense that I have a D at the start. Glad I came here for some advice.

Johno100 wrote: »

I'd want a full breakdown of what is being charged.

I'd suspect that, as with most modified car policies, you are dealing with a broker and the underwriters are somebody entirely different, likely both are trying to charge you a cancellation fee.

Yeh I will ring them Monday and ask for this breakdown. When I initially asked they wouldn't tell me more than, 'it's our charges'

darkstryder360

I

BeenThroughItAll wrote: »

We have a winner.

Leave it out of this thread I want some actual help not some conspiracy theorists.

AdrianC wrote: »

£540 - £200 = £240 not £260.
£540/12 = £45/mo. So £90 in pro-rata premium.
£240 "spent" less the £90 of premium "used" is £150 in cancellation costs.

How are they calculating that £150? They will tell you if you ask.
Were you paying the premium monthly? If so, there are finance costs included in that £540 which won't be refundable.
What do the policy docs you received when you bought the policy say about cancellation charges?

Nope. Not paying monthly. All paid in full at the time the policy was taken out.

There is a lot of fluff involved in the cancellation charges. Will attach an image hopefully it's legible as its a screenshot from my iPhone.

Ok I can't add a 'link' take out the space after '//'

http:// imgur.com/download/0axf9Tp

AdrianC

No fluff at all. That seems very clear and simple - one to two months, they charge 40% of the total premium; two to three, 50%.

You've said you're being charged £240 of £540, which is near as dammit 45%. I suspect that the rounding of figures will bring it out to exactly one or the other, depending on which side of two exact months you are.

You implicitly agreed to that by not cancelling the policy in the first fourteen days after receiving the paperwork.

Iceweasel

I don't see anything 'wrong' at all.

Insurance doesn't work the way you think.

What would have been the cost at the outset if you had asked for a 2-month short term policy?

It certainly wouldn't have been 1/6th of the annual cost.

Cancelling an annual policy means (for many insurers) that the policy reverts to a short term one and the whole thing is re-calculated.

Hence the references to 40% and 50%

If a refund was to be an exact pro-rata figure then anyone wanting insurance for say a week would be perfectly happy to pay for a year's cover and then cancel it after the week to get 51/52ths of the premium refunded.