Alienware 17 R4 2017 review
My motor insurance policy was effective from January of this year. In August I sold the car. I telephoned the Insurance Company on the day the car was sold. They said to return the Insurance Certificate.
When I asked about a refund of the unused part of the premium, they said I would not be charged a "cancellation fee" because I had other policies with the company. However when the refund came through it was for £30 instead of the £70 I had worked out I should have received.
My question is can an insurance company charge a cancellation fee?
With the paperwork, there should have been a list of chargeable fees for cancellations, change of original requirement etc, which is quite legal and acceptable within the trade.
If you want to take the mater further, then write a letter to the insurance company or whoever issued the refund, and ask them for a break-down of costs. One thing that you may need to consider, is the fact that if you used a 'compare' company or broker, then you might not be dealing with the insurance company direct in the first instant.
As Colin stated, "they can use their discretion", but it would all depend on the agent that you dealt with.
Many thanks for responding Colin and Spuds. I dealt direct with Saga Insurance by telephone.
I have had numerous telephone discussions and every one of the different members of staff spoken to said I would not, should not have been charged a cancellation fee.
No breakdown was given when the refund was made. I shall write and ask for this and give them the lengthy history of events. Instead of relying on the spoken word of various members of staff perhaps the written word will make progress. I kept notes of the names of everyone I spoke with including times and dates.
They said on the day I cancelled the policy that because I had a Saga Household Insurance Policy, in addition to the Saga Motor Insurance Policy I would not be charged a cancellation fee.
Thanks again for your advice.
Perhaps you were expecting an exact pro rata refund for the unused period?
I doubt it works like that.
Either the company will have a fixed cost to set up a policy which they will deduct from the premium first before giving any pro rata refund, or they will charge for the used months on a more expensive short term rate than the normal annual rate or simply charge a cancellation fee or a mixture of the above.
With the rise in the use of comparison sites for insurance purchases, companies are getting ever more inventive at offering a low initial price and recovering their margins from ammendments to the policy.
However, I just wanted to ask about car insurance. I pay monthly, and have been with the same supplier since September 2009, so technically in my second year. The policy states that if I cancel, I have to pay a percentage depending on when I cancel (I might be selling the car soon). Is this right? Why should I pay for insurance that I won't need? If I paid annually, I would be entitled to a refund for unused premiums, so why should I pay a premium I'm never going to use? Sorry if this is the wrong place for this question. Thanks
Borderview if you cancel a policy before the end of the insured period you will be charged short period rates .
6 months = 60% of the annual premium
8 months = 80% of the annual premium
9 months = 90% of the annual premium
10 months =100% of the annual premium
So for 8 months cover you will be charged 80% of your annual premium does this make your refund about right ??
Sorry oresome that is what you have said but just put a different way
Just had an experience with Asda car insurance who wanted to charge £75 cancellation fee.
Thanks everyone for responding. Lets just say I have moved on in life.
My premium for the period 12th of January 2010 to 11th January 2011 was £199 which was paid in full at the start. I cancelled the policy when I sold my car on the 19th August 2010. I received a refund of £29 odd.
I probably would not have queried the whole situation if it wasn't for the fact that, as mentioned above, I was told I would not be charged a cancellation fee. A reduction of £40 of the pro rata refund premium, to me, amounts to them charging a cancellation fee.
I have probably done what Saga hoped for. Given up.
This is possibly why a number of compare or price match companies are springing up, and extra fees are becoming the normal way of doing business. If someone gets paid a commission for setting up a deal, they want paying. If that deal falls through then in all possibilities that commission is recoverable, and someone as to pay for this, usually the customer.
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