Car insurance cancellation costs

Whiteknight2009

Hi everyone and thanks for letting me join.

My wife took a new car insurance policy with Onecall insurance through Money Supermarket 4 weeks ago as it was the most competitive quote. Unfortunately her car blew up and she had to buy a new one. She asked them for a quote on her new car and all looked ok but then we noticed it had a 5k excess. We found a new insurance company and took their policy. We tried to cancel the Onecall policy and was told we needed to pay virtually the whole years premium. The whole year was £370 and they wanted £300 to cancel. When we disputed this they just said pay it or keep the policy active. We don’t have £300 spare so are having to pay the monthly instalment's on a car we don’t have. We knew we would have to pay some cancellation fee but a whole year seems excessive.

Can anyone please help? Is this normal?

Thanks in advance

born_again

Given the mention of monthly payments. Then you took out a loan to pay the policy in full. So that adds all sorts of extra's to the cancelation, not just a simple pro rata refund.

Sadly happens to many as they do not read the T/C when paying for insurance monthly 🤷‍♀️

dunstonh

Can anyone please help? Is this normal?

For the car insurance premium, no, it's not normal.

What is normal is a cancellation charge, typically circa £50.And a refund of premium after a deduction.That deduction is not pro rata but relatively pro rata.

If additional things were paid for, such as Breakdown cover, Legal expenses, Home emergency cover then often these are non-refundable.

What was your breakdown of the cost to cancel?

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81970850#Comment_81970850

Given we are talking about an intermediary here its not unheard of for both the intermediary and the insurer to have a cancellation charge, similarly not unusual for the time on cover to be calculated at short term rates rather than a proportion of the annual policy.

As has already been mentioned there is a loan involved too so that is allowed to carry an early resettlement fee.

Some intermediaries also have a commission clawback clause so if they have to refund commissions to the insurer then you have to fund that.

There are a few intermediaries whose business model is well known to be quote low, triple check all the quote details and have high fees for inaccuracies in quote data, changes and cancellations. For those that accurately answer questions and run the full year without changes they arguably get a very good deal, for any other customer the initial low price becomes above average