Cancelled my car insurance and I *still* owe them money?!

mh1923

I decided to get rid of my car to save money. I cancelled the car insurance and they told me it would be a £35 cancellation fee. Okay, not thrilled with that, but it's not wholly unreasonable.

Then I got the cancellation letter today and it tells me that the total amount owing on my policy is £158.50!!!!! This is probably the balance remaining in the policy year (which would have ended in October) plus the £35 (I didn't do the maths, but that seems right) which basically means I would have been better off leaving the policy in place for a car I no longer own.

Is this legal? How can I fight it?

mh1923

If it matters, I was paying by direct debit and I had no claims on the policy.

Quentin

When you cancel, apart from the cancellation charge, you will not get a full pro rata refund. As you are paying monthly, then your actual bill will now be more than the pro rata amount you have paid so far.

Check your schedule for the cancellation policy.

mh1923

I just found this on the website:

You may cancel your policy at any time by notifying us and returning the certificate of insurance. You have the right to cancel your policy without penalty within 14 days, however you will be charged an administration fee of £35 and a fee for the time your policy was active. If you cancel after 14 days the above administration and time on risk fees still apply. If you are paying your premium under any instalment scheme or credit transaction, you will not receive a refund for any deposit or instalment you have already paid. If you cancel your policy after 14 days, you will not receive a refund for the optional legal cover.

That makes it sound like I should only be charged for the time on risk (Oct through April) + £35. The time on risk should be taken care of with the direct debit payments I've made to date. The entire policy was under £300, so the only way they can justify me still owing £158 is if they are charging me for the whole policy year.

lisyloo

I think you need to call them and ask them to explain why they think you owe that much.
Perhaps they haven't taken into account a recent payment.
Perhaps they have made a mistake.

I think you need to get the to break it down and explain what the extra is for.

dunstonh

Car insurance is an annual contract. When you pay monthly you are taking out a credit agreement. Often the payments are not over 12 months but 10 so there is a bit of averaging required.

If you cancel the policy during the year your monthly payments may not be in sync with point of cancellation. Plus the insurer/broker will not give an exact pro-rata refund.

So, for example, if you cancelled after 6 months and you paid annually you would pay a cancellation charge and may get back 4-5 months worth of your premium. If you pay monthly, you may end up owing them money. In you are in the tail end of the policy year you may end up having to pay the full amount.

Major

I am in the same predicament, renewed my insurance last month, sold my car this month and wanted to cancel the insurance. They want £15 for time elapsed, fair enough, but the best part is they also want £65 for the pleasure of doing it, total £90. I paid in full and I really don't mind paying an administration fee BUT £65 is excessive. I am with the Post Office sub let through BSLI and will never use them again, my wife is also with them for her car and we have home insurance also. They have now lost our business unless someone can advise how to get them to drop the admin charges.

jason.p_3

i cancelled my car insurance with adrian flux yesterday. i paid £300 already at the start of the policy, and had been on cover for only 3 weeks. they then said for me to cancel i would owe them £700+! after a good hour on the phone this reduced to £142, as they "waived" their commission which i was going to be paying in the £700...

crazy