Car Insurance cancellation

tommytynan123

Son had reason to cancel car insurance with Swinton. Premium was paid on the 1st month (£86) and he cancelled on the 10th approx. He was charged a cancellation fee (half expected) of £56 but their reason was based on the fact that Swinton pay the insurance company the whole fee up front and this charge is to do with that. That reason is new to me? Any thoughts on that please while he attempts to find all the paperwork from inception. Also, if you cancel 10 days into a month should they refund the remaining 20 days? Thanks. (I need to get him an index file for his paperwork)

forgotmyname

The insurance was for a year and he borrowed the money to pay it in installments. So there will be fee's to pay on top of the premium.

What do the terms and conditions show the refund amount 2 months into the policy?

With some if you cancel early they charge you the short term policy rate.

dunstonh

Apart from the 14 day cancellation rights period, the refund on cancellation is relatively pro-rata but not exact. it tends to be weighted slightly that more is penalised in the early days than later (to reflect set up costs early on). It tends to be rounded to nearest month or two. A lot of providers will publish their cancellation rates.

paddyandstumpy

So... Swinton will charge a cancellation/admin fee. This will be in their paperwork.
It also wouldn't surprise me if they are clawing back any loss of commission by the cancellation. Plus then (because paid by installments) there will be an early fee (i.e. loss of interest) charged.
If you've got away with £56 charged (including the cost of 10 days cover), I'd say you've got off lightly with Swinton.

There's a reason they are always suggested as the ones to avoid...