Car insurance- cancellation fee?

money_saver_4

Having sold my car I cancelled the insurance policy. When the insurance company refunded the remaining premium, I discovered that they charged me £49 cancellation fee. I think it's rather excessive, given that the policy premium was £198.00. When I spoke to them, they said it's because they are charged £45 by DVLA to make a note on a central database that the car is no longer insured. Does anyone know if they can do this? Thank you.

msmicawber

Yes, they can. If you look in the policy's terms and conditions, it'll set out what cancellation charges they levy for cancellation at various times. Sorry to be the bearer of bad news.

ronben

money_saver wrote: »

they said it's because they are charged £45 by DVLA to make a note on a central database that the car is no longer insured. Does anyone know if they can do this? Thank you.

I used to work for the RAC and they never charged because 3 clicks of a mouse to tell DVLA was seen to be taking the mickey, and in any case your log book would of been sent off and that will notify DVLA so I think your insurers are telling pork pies.

Quentin

RAC do charge an "admin fee" when you cancel. (£30.45).

But if they cancel, then there is no similar fee paid to the poor customer left with no insurance!

Also note they don't allow policyholders the usual third party cover when driving other cars.

dunstonh

I discovered that they charged me £49 cancellation fee. I think it's rather excessive,

Doesnt matter what you think. Its an acceptable charge.

The reasons for the charge that you were given were feeble but it goes a lot further than pressing a few buttons. You agreed to an annual contract which you are now breaking. The insurer is entitled to recover their costs for setting up that contract as well as loss of profit. They also have to cover all the costs of running that call centre and everything else.

So, whilst actually pressing the button may be a few pence, everything that has been put in place to allow that button to be pressed costs an awful lot more.

The FOS have ruled on this with charges upto £50 and have refused complaints that have been made about them.

Quentin

dunstonh wrote: »

Doesnt matter what you think.

What happened to everyone's opinion being respected? This is Britain. We are all entitled to our opinion, and to express it here!

raskazz

money_saver wrote: »

Having sold my car I cancelled the insurance policy. When the insurance company refunded the remaining premium, I discovered that they charged me £49 cancellation fee. I think it's rather excessive, given that the policy premium was £198.00. When I spoke to them, they said it's because they are charged £45 by DVLA to make a note on a central database that the car is no longer insured. Does anyone know if they can do this? Thank you.

The charge is fair.

The explanation, however, is rot. The MID is nothing to do with the DVLA, it is part of the Motor Insurer's Information Centre, a subsidiary of the Motor Insurer's Bureau.

Catherine27_2

money_saver wrote: »

Having sold my car I cancelled the insurance policy. When the insurance company refunded the remaining premium, I discovered that they charged me £49 cancellation fee. I think it's rather excessive, given that the policy premium was £198.00. When I spoke to them, they said it's because they are charged £45 by DVLA to make a note on a central database that the car is no longer insured. Does anyone know if they can do this? Thank you.

Check out www.matthewsguide.co.uk.

All the charges by all the insurers are in there. It's a little guide worth having. Forewarned is forearmed. £49.00 - what a rip-off. I would certainly dispute it some more to see if you can get some money back. OK they have to charge something for admin - they're not a charity but that's daylight robbery!

lisyloo

What happened to everyone's opinion being respected? This is Britain. We are all entitled to our opinion, and to express it here!

Everyone is entitled to hold an opinion and discuss it (politely).

What I'm sure dunstonh meant it that in respect of the legal situation it does not matter two hoots if you disagree.
If people sign up to a contract that is legally binding and "fair" according to the regulators, then in a legal sense it's binding whatever people's opinions.

In some situation you can choose not to insure and self-insure but for cars you need a minimum of 3rd party insurance because that is the law.

If you don't like it the options are

moan (definitely pointless)
campaign (probably pointless)
start you own company
self-insure where you can

I don't particulalrly like high fees, but I do think that in general more people should acquaint themselves more fully with the contracts they sign up to in advance (not aimed at anyone in particular).

money_saver_4

Thank you for all the replies. It sounds like there isn't much I can do about the fee. What worried me now is that my husband (who also holds a policy with this insurer) is planning to change his car in the next month or two and will also be charged £49 for canceling the existing policy.

Just wanted to add quickly that my opinion probably matters very little if at all. But I am a little wiser now about this company's standards and will be voting with my feet.

lisyloo

Just wanted to add quickly that my opinion probably matters very little if at all. But I am a little wiser now about this company's standards and will be voting with my feet.

Well if lots of people do the same then it will matter.
However most people will work off policy price, so I have a feeling that there won't be enough of a "backlash" to force the companies to change.