Car insurance cancellation pro-rota fee

cooperpaul

Hello,

I'm having a problem with my previous car insurance company quotemehappy (aviva), regarding cancellation fee.

My policy renewed in January, then in March changed the car all fine no problems. Last month I made the Decision to buy a VW transporter shuttle, this would now be my main vehicle so I wanted my no claims bonus on this vehicle. There was going to be an overlap where I needed two vehicles insured, while I sold my previous vehicle.

I decided to remove my no claims from my quote me happy policy, to add onto the transporter policy, different insurer. All went fine my premium went up, but I was cancelling this policy so wasn't bothered.

Now once I canceled the quote me happy policy, they want to charge me £291 for cancelling the policy (I pay monthly direct debt). Took me a while to find out what the fee is but they basically what to back date the payments to cover the increase in premiums now I have removed the no claims. Below is the workings out from them.


You then requested to reduce your NCD to 0 and the annual premium for the year increased to £1093.17 however since you cancelled the policy mid term the new annual premium became £639.87 covering 225 days instead of £364 days. We can see from the monthly installments you paid so far in total it comes to £404.19 which technically means based on our pro rata calculations you are owing us £235.68 for time on cover and an additional £56.00 for cancellation fee meaning (235.68 + 56.00 = £291.64) hence you are owing us £291.64.

Can they do this?? 

I have in writing on a letter that I will only be charged forward from my next direct debt date, but according to this they want to back date it all.

i can't find anything in my policy wording about this pro-rota fee only £50 cancellation fee.  

MyRealNameToo

cooperpaul said:

Hello,

I'm having a problem with my previous car insurance company quotemehappy (aviva), regarding cancellation fee.

My policy renewed in January, then in March changed the car all fine no problems. Last month I made the Decision to buy a VW transporter shuttle, this would now be my main vehicle so I wanted my no claims bonus on this vehicle. There was going to be an overlap where I needed two vehicles insured, while I sold my previous vehicle.

I decided to remove my no claims from my quote me happy policy, to add onto the transporter policy, different insurer. All went fine my premium went up, but I was cancelling this policy so wasn't bothered.

Now once I canceled the quote me happy policy, they want to charge me £291 for cancelling the policy (I pay monthly direct debt). Took me a while to find out what the fee is but they basically what to back date the payments to cover the increase in premiums now I have removed the no claims. Below is the workings out from them.


You then requested to reduce your NCD to 0 and the annual premium for the year increased to £1093.17 however since you cancelled the policy mid term the new annual premium became £639.87 covering 225 days instead of £364 days. We can see from the monthly installments you paid so far in total it comes to £404.19 which technically means based on our pro rata calculations you are owing us £235.68 for time on cover and an additional £56.00 for cancellation fee meaning (235.68 + 56.00 = £291.64) hence you are owing us £291.64.

Can they do this?? 

I have in writing on a letter that I will only be charged forward from my next direct debt date, but according to this they want to back date it all.

i can't find anything in my policy wording about this pro-rota fee only £50 cancellation fee.  

When you buy insurance you buy an annual policy, if you can't afford it in one go then you also get a loan from them to cover the premiums and allow you to pay monthly for the annual product. If you go via certain brokers who can't afford to sub you the premiums themselves they actually refer you to a proper loans company who provides the premium. 

I suspect the problem is coming around the NCD and not the cancellation. I can't speak for Aviva but with our systems you either had an NCD for the year or your didnt there was no way to have an NCD for the first 8 months and not for the rest. By asking to remove the NCD it would be removed from the start of the policy not from the time you asked it to be. I suspect Aviva are probably doing the same. 

To be honest we would have generally refused to release the NCD mid term and tell you if you want it you need to cancel the policy. Had we allowed it we would have recalculated the premiums to £1,093, minused off what had been paid to date and spread the rest of the remaining months... ie the sum you owed for the prior months would be paid in the future. 

If you cancel then you no longer get the next 3 months to repay the debt on the prior months that have been revalued at 0 NCD and you have to pay it in full now. I suspect that is what Aviva are doing.

So, what were the comms around you asking to remove the NCD? Did they point out the new premiums for the year was £1,093? 

I'd ask them how they dealt with removing the NCD, if it was backdated to inception or only from the point you requested it... the answer to that will clear up a lot.

cooperpaul

@MyRealNameToo

Once they removed my no claims, I received an email stating the following; 

Thank you for sending confirmation of your proof of No claim discount.

We’ve noticed that the following information is different from what you’ve used in your quote:

• Your quote stated 11 years No claim discount
• We received proof of 0 years No claim discount

We’ve amended your policy with the correct details from 29/08/2025. Unfortunately this means that your premium has now
increased. As you currently pay for your insurance by monthly direct debit, your new monthly payments will be collected on
or immediately after the dates set out in the table below:

Please note: This increase will only apply to your monthly payments from 26/09/2025.

So they have given a date of when the change starts of 29/8/25 and not the start of the policy does that go against them

MyRealNameToo

cooperpaul said:

Once they removed my no claims, I received an email stating the following; 

Thank you for sending confirmation of your proof of No claim discount.

We’ve noticed that the following information is different from what you’ve used in your quote:

• Your quote stated 11 years No claim discount
• We received proof of 0 years No claim discount

We’ve amended your policy with the correct details from 29/08/2025. Unfortunately this means that your premium has now
increased. As you currently pay for your insurance by monthly direct debit, your new monthly payments will be collected on
or immediately after the dates set out in the table below:

Please note: This increase will only apply to your monthly payments from 26/09/2025.

So they have given a date of when the change starts of 29/8/25 and not the start of the policy does that go against them

I dont think that is clear enough to state it's not being back dated to inception, particularly given how they have started the email off. 

what were your monthly payments originally? What were the revised payments to be from 26/9 ?

cooperpaul

@MyRealNameToo

Original payment £50

After NCB removed ?£151

cw8825

It does sound like the whole policy has been backdated. 
It refers to the original quote
In hindsight it would have been best to leave the NCD before cancelling 
Even then you would have still owed when the policy was cancelled what you need to work out is how much extra the time being insured on 0 NCD has cost you

sheramber

cooperpaul said:

@MyRealNameToo

Once they removed my no claims, I received an email stating the following; 

Thank you for sending confirmation of your proof of No claim discount.

We’ve noticed that the following information is different from what you’ve used in your quote:

• Your quote stated 11 years No claim discount
• We received proof of 0 years No claim discount

We’ve amended your policy with the correct details from 29/08/2025. Unfortunately this means that your premium has now
increased. As you currently pay for your insurance by monthly direct debit, your new monthly payments will be collected on
or immediately after the dates set out in the table below:

Please note: This increase will only apply to your monthly payments from 26/09/2025.

So they have given a date of when the change starts of 29/8/25 and not the start of the policy does that go against them

The  increase from 26/9 refers to the increased payments now due are being collected from that date.

It is not referring to the  increased annual amount due to the lack of NCB only being from 26/9. 
. 

They could have asked you to pay the additional amount due  up the cancellation of the NCB  in a lump sum now, but have added the amount to the future payments  to spread the cost.