Cancellation costs

Jaym&jac

Is it legal for companies to charge a cancellation fee at the end of the term ?If I let the policy run out there is surely nothing to cancel. Is this just a con or can they do it?

dunstonh

Is it legal for companies to charge a cancellation fee at the end of the term ?

If you are cancelling the plan before the end then yes it is.
If the plan has got to the end then there is nothing to cancel.

If I let the policy run out there is surely nothing to cancel. Is this just a con or can they do it?

Are you perhaps mixing up cancelling with not renewing?

Jaym&jac

My apologies. Yes that's what it is. It's non renewal fee. Trying to charge for not renewing surely can't be right?

dunstonh

What type of policy is it?
Is it a broker charge or a insurer charge?

ThinkingOutLoud_2

This may be relevant or not pending the details.
https://forums.moneysavingexpert.com/discussion/3143816

Jaym&jac

This particular one is a car breakdown firm ( green flag) but it has happened before with car insurance and just got me thinking about the legality of it

paddyandstumpy

Which car insurer has charged a non renewal fee?

Perhaps you've asked them to cancel from the renewal date, and all they've picked up on is 'cancel' and assumed a fee is chargeable.
It's not right, as mentioned above once the contract is expired there is nothing to cancel.

ThinkingOutLoud_2

Jaym&jac wrote: »

This particular one is a car breakdown firm ( green flag) but it has happened before with car insurance and just got me thinking about the legality of it

Ok so obviously the exact timing of when you told them to cancel the policy does matter. As does whether you have made a claim in the year or not. Yet in theory at renewal you should be able to cancel without charge.

>>> What did you do to cancel and when and did you claim (breakdown and ask for assistance?).

And what fee did they charge vs what is mentioned on your schedule?

The clause below says the admin fee will be on your policy schedule. There are no other applicable fees mentioned that I can see.

They have one related FAQ...

Q10I've changed my mind - Will I have to pay the administration fee for cancellation of £10.60 (includes Insurance Premium Tax) if I don't renew my policy?
Answer: No. The administration fee for cancellation fee of £10.60 (includes Insurance Premium Tax) is only payable if you cancel outside the 14-day cooling off period after you renew.

And in their wording...

CANCELLING YOUR POLICY
YOUR RIGHT TO CANCEL
You can cancel your policy any time.
If you’ve just bought the policy or just renewed and you cancel within 14 days of the policy starting or of you receiving the documents, whichever is later (this is the cooling off period), we’ll give you a full refund, as long as you haven’t made a claim.
If you cancel after that, as long as you haven’t made a claim since that cover-year started, we’ll give you a refund based on how long your policy had left.
If it’s outside the cooling off period and you have called us out, you can still cancel your policy but you won’t get anything back.
After the cooling off period, we’ll deduct an administration fee from any refund we give you. You can see how much that will be on your schedule.
If you’ve been paying by instalments, it still counts as an annual contract. That means if you cancel your cover but you’ve already claimed, you’ll have to pay the full premium for the rest of the year.
Cancelling a direct debit won’t automatically cancel your policy.

forgotmyname

You can let it lapse with no charge, BUT is it on automatic renewal? If thats the canse you need to cancel the renewal.

Be careful on the wording when you cancel. I think some people say i wish to cancel. Not i wish to let the policy lapse and do not with to automatically renew.

Jaym&jac

It was budget insurance and iirc it was about £45 to not renew. I hadn't cancelled it I just let it run out and went with another company. They were threatening court so tbh just paid it so as not to affect credit rating

Jaym&jac

Again I never cancelled. They just wrote to me and said your policy is due to run out and it was going to cost me £9 to not renew. Just makes me mad that I have to pay to not renew