Charged for leaving car insurance early?

fox2125

I wonder if anyone has experienced this bizarre piece of customer bonding with their insurance company. My car was recently scrapped through engine failure and so I contacted my insurer (Budget) to kindly inform them that I wanted to cancel the policy which I had already PAID IN FULL until May this year. Imagine my silence on the other end of the phone when the operative told me that I OWED them £37 pound to leave early instead of getting a rebate, on insurance I was never likely to use again. Has anyone had this 'world gone mad' moment, or is this normal and I'm out of the chain here?

advantix

If your car was written of then AFAIAA the insurance would of been cancelled as soon as payment was made to you. Also, you would not get any refund anywas as a claim was made.

I AM NOT AN INSURANCE EXPERT AND AM SURE SOMEONE MORE QUALIFIED THAN ME WILL BE ALONG SOON

dunstonh

Your comments are not clear as to whether you have made a claim or not. I am going to assume you have and in which case Advantix is correct.

You paid to cover yourself if you had an accident in that year. You have and therefore the insurance policy has done its job and no refund is due. Most insurers however will transfer outstanding premium to your new car as goodwill but they will not refund any premium if you dont get a new car.

fox2125

Thanks for the reply. I must point out it wasn't an accident but car wear and tear which made me request the policy ends. I can see your point about insuring a full years worth of risk, but what I couldn't understand was why they were asking ME to pay to leave the policy early?

lisyloo

Hi fox,

These days insurers strip out all admin costs from upfront premiums.
No doubt this is to come up with the most competitive premiums.
This means that if you want them to do any admin e.g. change address, change car, add a driver, cancel etc. then they charge you for the costs.

You would be entitled to a partial refund if you haven't made a claim but they would want to deduct the admin fee from that and in this case the number comes out negative.

That's the principle anyway but in this case the maths puzzles me.
With a couple of months to go I would have thought you would be in credit.

In your posistion I would ask them to re-check it and break it down for you over the phone
e.g.
refund - admin fee = -£37.

i.e. I'd want to know how much the refund should be and how much the refund is to get to that number.

fox2125

Thanks Lisyloo for the reply. To be honest, I've given up I had a similar problem when I was quoted a higher premium last year for my home and content insurance. I never made a claim and yet, the premium was £50 higher. I searched online and found the same insurer (Halifax) was the cheapest. When I phoned to get the deal, I was told that I had to leave my current policy and start with them all over again. Another cog in the stupidity of consumer loyalty. I'm very accustomed now to expect the worse and be happy with bog standard service. Thanks again. Phil.