The Great 'Car Insurance Cancellation & Administration Fee' Hunt

hidinonweb

dunstonh wrote: »

No you dont

You are not talking about the administration charge but the premium refund. Two different things.

Well it's a charge made when you cancel your policy which means you pay over and above the pro-rata amount (not what most people would expect I'm sure), so in effect it's the same thing.

The application of short-term rates is a common practice throughout the car insurance industry, but not universal, so before you take out a policy check what all the penalties are for cancellation

hidinonweb

sickinthebin wrote: »

"Anything upto £50 is considered fair. There are no examples of anyone having to pay more than £50 unless they are behind on their premiums and/or the premiums are not pro-rata (that would only apply to monthly)."

I have an example.

YES.

They charge on a percentage basis linked to the time remaining on the policy and the percentage goes up the nearer you get to the end of the 12 month policy term.

If you cancel with 7 months remaining for example they charge you 80% of the pro rata'd amount for that 7 months.

So, if your policy is £240 per year, 7 months pro rata is £140, therefore they charge you £112 to cancel, PLUS and admin fee of £15.

Absolute, unapologetic daylight robbery, but it is set out in the policy schedule which i stupidly didn't check before my wife called to cancel. My wife did ask them what the cancellation fee was before cancelling and they indicated that it was £35. In fact the £35 is included within the % charge but they conveniently glossed over that and concentrated on the fact that we would get a £13 "refund".

This basically means that if you want to make any changes (new car for example) they can quote way higher than competitors in the knowledge that it will cost you a lot of money to cancel and go with someone else. Win/win for them as they either carry on insuring your new car at an inflated premium or if you do cancel they keep the majority of your money with no risk.

Very annoyed with myself.

Fortunately I spotted this while looking for insurance for my daughter who is currently on a provisional licence. It is quite frankly outrageous and could lead to an effective penalty of £400 if I have to cancel when she passes her test. What the bad insurance companies do, of course, is hike up the premium when you pass your test, knowing that you will have to pay a fortune to cancel and look for an alternative insurer.

So far I have found that Yes and Barclays apply these short-term rates when you cancel, and it is fairly common practice throughout the car insurance industry, but not universal. So before you take out a policy check what all the penalties are for cancellation particularly for policies with high premiums. I]Maybe this needs a new thread[/I

chrishodgson100

Hi,

For some reason I am unable to receive Temporary Car Insurance for 5 months due to my postcode.
Please can someone advise me is it better to purchase the Insurance monthly and cancel the insurance after 5 months or would it be better to buy the insurance in one payment and cancel the insurance after the 5 months. I am struggling to get information on this subject on the internet.

ScoobyZ

Hi can you add Performance Direct. (aka grove-dean.co.uk)
They charge £35 plus 15% of policy remaining.

My Insurance was £160 for the year with just under 7 months left they refunded £7.43.

Have had a few cancellation charges lately, but this seems the worst.

joanne_d_3

Budget cancellation fee - £38

Admisnistration fee - £30



Joanne



Have just cancelled my policy with Budget

Dr_Phil

Hi, does anyone know what my options are regarding this? I am with aviva and I am entitled to a refund of my policy as I have canceled it but I have lost the cert (doh!) and before admitting this to aviva I wanted to know if I can still get my refund.

I am aware they can issue duplicates of the policy at a charge and if this is the only option then ok fine - they send them to me, I send them back again lol.

cheers

fluffytrollop

Anyone know of a good campervan policy provider? adrian flux has been a nightmare, any suggestions?

fluffytrollop

Oh and reading some of your horror stories rings many bells with me..

walshy.walsh

the missus has just tried to cancel a £450 annual premium car insurance policy with SURETERM DIRECT, yes SURETERM DIRECT (just incase anybody from there is reading) and after 1 months cover £90ish deposit and £38 DD they want £180, yes £180 to cancel, i nearly fell off my chair. thats nearly a whole 12months premium for for a twelve of the cover. i've told her to just cancel the DD and ignore them. rightly or wrongly, but that is just outright theft.

dunstonh

walshy.walsh wrote: »

the missus has just tried to cancel a £450 annual premium car insurance policy with SURETERM DIRECT, yes SURETERM DIRECT (just incase anybody from there is reading) and after 1 months cover £90ish deposit and £38 DD they want £180, yes £180 to cancel, i nearly fell off my chair. thats nearly a whole 12months premium for for a twelve of the cover. i've told her to just cancel the DD and ignore them. rightly or wrongly, but that is just outright theft.

You should look forward to a credit default bring registered against your wife and address which will damage you in future when trying to obtain credit.

Short term cancellation rates are high to prevent people using annual policies to pay for short term needs.