Car Insurance cancellation charges

Hugh_bourhill

I have car insurance with elephant and want to cancel my policy as I am selling my car. They want to charge me £45 pounds to cancel the policy. Is this charge legal or does anyone know how to avoid it. The agent on the phone suggested I just keep the policy on so I can build up my no claims bonus! Any suggestions would be welcomed.

dunstonh

Yes it is legal.

You are terminating the contract early and they are entitled to charge a termination fee. You often pay a charge on changing vehicle too.

If there isnt long left to go or there isnt much to refund and you dont have a full no claims bonus, then leaving it going can be beneficial if you are buying another car. If you plan to go without a car for some time, then it would be wasted.

telly-addict

Yes it's legal to make a charge, provided that it's fully laid out in the policy conditions. You will need to refer to the Elephant policy wording - there will probably be a cancellation condition under the General Conditions.

It's common to make a charge, particularly in the first year of insurance, to reflect the administration costs. Some insurers allow a refund of premium for the unexpired period of cover in subsequent years.

Where you have a claim under the polciy during the current policy year, you are unlikely to get any refund at all.

As always, refer to the small print!

I'm not sure that it's common to charge for a change of vehicle. Some insurers may make an admin charge, but in my experience the major insurers won't make such a charge. There may be an additional premium to pay, but this is more likely to be due to a change in the type or age of the vehicle being covered. You may even be due a refund, if the car is of a lower insurance group or is older! Again, you need to refer to the policy wording.

maclean2

Hi - Elephant's site says that the cancellation provisions are given on the back of your insurance certificate so I would check it to see if it mentions a £45.00 charge.

HTH

dunstonh

I'm not sure that it's common to charge for a change of vehicle. Some insurers may make an admin charge, but in my experience the major insurers won't make such a charge. There may be an additional premium to pay, but this is more likely to be due to a change in the type or age of the vehicle being covered.

Just did a vehicle change and the was told there was a £15 admin charge for change of vehicle. Screentrade (LTSB) was the company I used for that. Hence my post.

daveonline

Yes a lot of insurance companies will charge for cancelling a policy especially if you are in the 1st year of insurance with them, after that most companies will give you a pro-rata refund.
points to remember -
Are you getting another car soon, if so you maybe able to suspend the policy until you get another car and then get back some of the suspended time.
If, as other moneysaving experts have mentioned do you already have full NCB and is the policy nearing renewal ?
Dont forget if youve made a claim in the current year by cancelling you may not get back anything !.