cancelled insurance now they want £87!!!

piglet29

Hello, my son has decided to get rid of his scooter as it needs a fair bit of work on it and he is saving for a car, so he cancelled his insurance and has today received a letter from them saying he owes them £87.92!! Now this insurance is due to run out in May in any case, he pays monthly by direct debit, and it seems a lot to be honest, plus I have cancelled car insurance for same / different reason in the past and have never had to pay anything at all. So just wondering if anyone knew is this right, does he owe this or are they just trying it on with him cos he is young (18) and they think he doesnt know any better!!! Your help would be much appreciated as i intend to ring them on Monday but wondered if any of you good people had any advice before i phone, thankyou.

dzug

They are not trying it on - they are right.

He's paying monthly - that doesn't mean he has a monthly policy, but is paying his annual premium in instalments. He owes them the rest of the annual premium, less whatever he gets back for cancelling. After 9 months that won't be much and may be nothing - it won't be pro-rata

MarkyMarkD

It's incredibly likely to be nothing at 9 months, meaning that he owes them around 3 months' instalments.

dunstonh

This is one of the risks of opting for a credit agreement to pay an annual contract.

After 9 months there will be little or no refund off the annual premium so he has to pay the difference to the credit company.

losgiganteskid

In hindsight it would have been more favourable to have phoned the insurer before he cancelled then you would have known the position, that way he could have continued to pay the monthly instalment until the end of his policy year. Now they are asking he pays the premium in one lump payment. The reason it would have been preferable to continue paying monthly is that his policy would have remained in force and he would have, at renewal date, been entitled to a years no claim bonus - although this would have been earned on a bike, many Insureres will allow a first year no claim bonus on his car insurance which would have been worth quite a discount, say circa 30% ish.

This may now all be too late, cos you have asked for cancellation and will be required to pay the balance of premium all in one amount. In view of the above I would phone the insurer and say that in the circumstances would it be permissable for the policy to remain in force until renewal and you will pay off in one sum the amount of premium outstanding.

MarkyMarkD

All very wise advice from lgk.