Insurance Policy Cancellation Minefield

[RoadworkUK]

A word to the unwary

 

I remember a time where you'd buy a years insurance, sell your car six months later and claim the unused portion of the insurance back pro rata.

 

Doesn't seem to happen any more, and it looks like costing me a big chunk of cash.

 

When i first insured the Rover I took a policy out with RAC. It was £469 (too much bloody money), and because I didn't have that much cheese to spurt all at once, I set up a direct debit. One payment of £85, then nine of £39. Of course I end up paying through the nose this way, but I find it easier to find that much every month.

 

Six months later, Rover's out of Tax and Ticket and I see it as being time to put the Audi back on the road. It's a simple matter, says I, of swapping the Audi onto the Rover policy..... turns out not to be. For whatever reason the Audi puts my premium up by about £100. That scares me off.

 

So I go straight out to the compare-o-engines and start churning around for quotes. Eventually one surfaces for the Audi, about £366 or £409 on tic. Much better. I take the policy out, over the net, on my debit card.

 

A week later I've got all the paperwork through, I figure I better cancel the RAC policy and then forward my No-Claims to the new company. Phone up RAC:- "OK sir, that'll be a cancellation fee of £124."

 

Eh?

 

Surely, if anything, I've payed for the insurance I've used so far, you've even had interest off me? But no. A Car Insurance policy these days seems to have to be allowed to go on to the bitter end. See the details I have just confirmed in my policy document (The one you don't get until the policy has already started and "forget" to read")

 

If you cancel your policy

If you cancel your policy within 14 days of receiving your policy documents you will have to pay

for time on cover unless you have made a total loss claim, in which case all outstanding

payments will become due and no refund will be given.

 

If you cancel outside of the 14 day cooling-off period, we will charge a cancellation fee of £35 and

a percentage of the total premium payable for the policy.

 

If you cancel within... % charged If you cancel within... % charged

1 month 30%

2 months 40%

3 months 50%

4 months 60%

5 months 70%

6 months 80%

7 months 85%

8 months 90%

9 months onwards 100%

 

If you cancel while a claim is outstanding, you will have to pay the total amount of premium due

before the claim can be settled. If you cancel after a claim has been settled you will have to pay

the total amount of premium due. In either case no refund of premiums already paid will be given.

 

So. I have choices. Swap the Audi onto the Rover policy and suffer the increased premium for the next six months, plus whatever horrible charge the other policy wants to bum me for for cancelling within the cooling-off period.

 

Or say "fuck you very much" to the RAC, Pay the £124 to not have to see them again, and continue with the new £30 a month policy? Looking at the new agreement, the cancellation fees are much the same.

[Mr_Bo11ox]

I must have misunderstood something, if you cancel after 9 months you have to pay a cancellation fee of 100% of the premium? Is that right?

[scooters]

On a related subject...with insurance costing considerably more these days more people are option for the monthly credit option. Some of the intetest rates charged for this and penalty payments are downright usurus and need to be examined by the regulators. the whole rotten industry is designed to trip the unwary. It's a fucking disgrace.

[RoadworkUK]

I must have misunderstood something, if you cancel after 9 months you have to pay a cancellation fee of 100% of the premium? Is that right?

 

Almost... I think you have to pay the equivalent of the entire policy. EG if you cancel after 7 months you "only" have to have payed for the equivalent of 85% of it.

[RoadworkUK]

On a related subject...with insurance costing considerably more these days more people are option for the monthly credit option. Some of the intetest rates charged for this and penalty payments are downright usurus and need to be examined by the regulators. the whole rotten industry is designed to trip the unwary. It's a fucking disgrace.

 

This.

 

All of it.

 

Why the hell not have pay-as-you-go insurance? If I'm paying monthly (as I do), why should I have to pay for those months I don't use?

[dave j]

I sold my Pajero last year and cancelled the insurance, I had only had it for 7 months, the company i was with though didnt give any refunds after 6 months! I had to pay another 3 months instalments... not impressed!

[Negative Creep]

Cost me £80 to cancel the Mazda policy after a month. It would have been cheaper for me to take out day insurance every time I used it

[Father Ted]

Swinton phoned me tonight with my renewal quote - fully comp for a 13 year old Micra = £380, PR4 postcode, kept on drive, 7 yrs NCD.

Apparently thats with £80 cash back applied to the policy. I told them to cock off and hit ComparetheMeerKat and got a better policy for £254 (less excess).

And a cuddly meerkat too.

 

But yes, IBuyEco tried to hit me with a mega cancellation charge for motorbike insurance the year I mashed my left arm up, in the end I let the policy run to the end, it was cheaper.

[RoadworkUK]

....But yes, IBuyEco tried to hit me with a mega cancellation charge for motorbike insurance the year I mashed my left arm up, in the end I let the policy run to the end, it was cheaper.

 

That's another approach. I could keep the Rover insurance running and just have both policies in place, but I'm under the impression that I can't use the no-claim bonus I have if it's already being used by another policy.

 

Is this correct?

[Father Ted]

^^^ Probably not, not that it made any odds to me as the miserable cunts would not transfer my car NCB to the bike, nor the bike NCB to the car.

[CIH]

I must have misunderstood something, if you cancel after 9 months you have to pay a cancellation fee of 100% of the premium? Is that right?

 

No, if you cancel after 9 months you still pay the full, 12 months premium. It's been like this for years, though those terms are especially egregious.

 

....But yes, IBuyEco tried to hit me with a mega cancellation charge for motorbike insurance the year I mashed my left arm up, in the end I let the policy run to the end, it was cheaper.

 

That's another approach. I could keep the Rover insurance running and just have both policies in place, but I'm under the impression that I can't use the no-claim bonus I have if it's already being used by another policy.

 

Is this correct?

 

That's right.

[RoadworkUK]

Thanks CIH.

 

It's the NCB I find particularly galling. I can't understand why, having had no claims for the last six years (and beyond), I'm sent straight to zero if I wish to have an additional car. Surely the NCB should apply to whichever car you're actually driving at the time. It should move around with the driver. Makes sense to me....

 

It's really making me cross, now.

 

I can wholeheartedly understand why so many choose to go without altogether. And I can see those who choose to abide by the law becoming a minority.

[The Moog]

I think that mainly this applies to the monthly pay ones. It is because they take out a credit agreement with another company (normally part of them) to pay the policy up front but the repayments actually go to this other company who normally charge 25%+ interest for the privilege. Hence you are breaking a contract with the finance company rather than with your insurers. Still sucks donkeys bellend though...

[RoadworkUK]

I think that mainly this applies to the monthly pay ones. It is because they take out a credit agreement with another company (normally part of them) to pay the policy up front but the repayments actually go to this other company who normally charge 25%+ interest for the privilege. Hence you are breaking a contract with the finance company rather than with your insurers. Still sucks donkeys bellend though...

 

You're right. I don't want to sound like I'm more underprivileged than I actually am, but making obscene profit out of finance on insurance really is preying on those who can least afford to be preyed on, isn't it?

[Lankytim]

You may as well crash and write off the Rover to get your moneys worth out of them!

 

Have you tried adding the new car on to the existing policy? I.E insure two cars at once?

[RoadworkUK]

You may as well crash and write off the Rover to get your moneys worth out of them!

 

Have you tried adding the new car on to the existing policy? I.E insure two cars at once?

 

Must admit I didn't look at it too hard, the few firms I asked said "a grand, mate". or something. Plus I don't want both cars taxed at once.

 

That's another thing. You can have 6 months tax, why not six months insurance?

[Pete-M]

Insurance companies have done this for at least as long as I've been driving. So that's only 23 years or summat.

[STUNO]

Once again it seems like the compulsory insurance seems to be a 'carte blanche' for insurance cos to rip you off in any way possible.

I am very happy with our system where the companies have to attract our business. I would not go without insurance, and have recently had a claim after being hit while parked by a 'hit and run' driver. In goes the claim without ANY paperwork, booked into panel shop, loaner car provided then repaired perfectly.Insurance Co traced the other driver thanks to an observant pedestrian and he will pay them or will be made by them to claim on his insurance.

I'm over 60 so have a long insurance history and multiple policies on house etc. which helps a lot and do not actually know how much my car policy costs, but it is cheap and very efficient.

The system works very well here, if you are insured you are covered for anything (legal!) and if you are not you can lose your house to pay for Dotcom's Phantom or one of his 60 Mercedes.

And the police/ city council/ parking wardens etc. have absolutely nothing to do with any of it

[RoadworkUK]

Insurance companies have done this for at least as long as I've been driving. So that's only 23 years or summat.

 

As a 30 year old my naivety embarrases me sometimes; but It's obviously the first time I've had need to change cars halfway through a policy. I genuinely had no idea.

[Pete-M]

It's not you being naive, fella. It's just the way they do things.

 

If you cancel a policy after six months or so and then someone tries to claim from you it leaves the insewerance in a bit of a pickle. Which is why they do what they do. It's not nice, but imagine how much insurance would cost if every time someone had a bump they just cancelled their policy and got the money back before the claim made it to their ins.co. - who'd have to pay out because at the time of the bump they were insuring you. That's how they see it.

[RoadworkUK]

And that's where the naivety kicks in, I forget about all the nasty people out there!

 

I think the thing that shocked me the most is that, since they've got you by the balls and you have to see your policy through to the end, you are forced to pay whatever number they dream up should you want to change your car half way through.

 

I'll just underline it as a £150 lesson in life. *shrugs shoulders*.

[Pete-M]

And that's where the naivety kicks in, I forget about all the nasty people out there!

 

I think the thing that shocked me the most is that, since they've got you by the balls and you have to see your policy through to the end, you are forced to pay whatever number they dream up should you want to change your car half way through.

 

I'll just underline it as a £150 lesson in life. *shrugs shoulders*.

 

It's an unfortunate part of having insurance as a legal requirement. They can charge whatever they like, and do. My work is involved with the insurance industry and I hate the way it works. All the bungs and nefarious bullshit behind the scenes drives me mental.

 

So mental I'm seriously considering packing it in and going to live abroad.

[RoadworkUK]

Will the last person to leave the country please turn off the lights!

[scooters]

Sorry but this is another example of the breakdown in trust between the large corporate supplier and the consumer. The car insurance industry HAS a captive costomer base, parliament is beginning to look under their stones and they don't like it one bit. Last week, on the Today program Jack Straw was being interviewed along with the representitve of the insurance industry and was laying into the industry over the credit hire companies - the "would you like a courtesy car?" and querying the huge profits these guys are making from punitive terms of business and slippery use of 'small print' in their contracts. Also the huge discrepancy between what it costs to get a car repaired by an insurance company compared to what it costs to have it done yourself - almost 2-3 times as much in some circumstances. Just because the insurance/insurance finance sector has been getting away with it for years does not make it acceptable.

 

The high interest rates that monthly customers are forced to pay hit those who cannot afford it. My brother in law, a very rich man, can take advantage of the one off deals and even though his insurance is several grand a year, can pay it in one payment.

 

Sorry STUNO but "there but for the grace of god go you" for the majority of us who are not in as fortunate a position we are being ripped off left right and centre. How can Elephant POSSIBLY justify a £30 charge for making a single change to a policy? How can a finance company justify charging a customer £5k for 2 week's car hire of a shitty Corsa because it took the insurance company (that THEY partner with) the extra 2 weeks to process the claim? How can a finance company charge 33% interest on a loan that the customer is LEGALLY obliged to take out?

 

I am a business man myself and if I tried any of these tricks with my customers I would be out of business in a week. My contracts have to be clear, concise and fair, what can't their's?

 

I'd like to see the following changes:

 

1/ claims processed within 2 weeks post legal process/submission

2/ CLEAR AND FAIR courtesy car hire contractors - no contracted supplier - car rental copmpanies should be allowed to compete for all business

3/ VISIBILITY of repair costs, no flat fee pricing

4/ COMPETITION in insurance finance companies - if I want a loan to buy anything else I can shop around - why not here? Yes, I could 'borrow the money to pay for the insurance' but when was the last time you tried to borrow cash up front and gave the reason as 'car insurance'? No more 'preferred finance options.

5/ Special insurance deals for new drivers/young drivers - black box recorders are a VERY GOOD IDEA

6/ Pay as you go insurance - the technology now exists for ANY car to be clocked on a pay as you go

basis

 

All businesses need to make a profit - but profit is very different from profiteering and when competition breaks down, as we have seen in the banking sector as well, companies seem to think they can push the envelope when it comes to creaming off their customer's cash - a quid here, a tenner there - it all adds up. It's essential to have a bank account these days - you cannot function without one - yet even if you have a basic bank account and go 1p into the red, usually for a direct debit payment -the banks will hit you with a 10-20 quid charge EACH TIME - my cousin is in this situation - last month his pay was a week late - the bank bounced everything and charged him £100 in charges despite him warning them that this was going to happen. The knock on effect is that he is £100 down, only he is more than that now because that has put him into the red at the end of this month and 2 of the payments are going to bounce again - the bank have already refused to grant him a short term £50 overdraft. Through NO FAULT OF HIS OWN he is being skinned - the bank charges are out of proportion and hit the poorest the hardest - if a loan shark tried this he'd be locked up but once again corporate business laughs at all of us.

 

This isn't capitalism, I belive in capitalism...well, human capitalism anyway - this is what happens when a complacent and lethargic customer base allows several organisations to corner essential markets in an uncompetitive way. Starts with the banks and goes on through car insurance and utilities. In the states they don't have this problem - their markets remain competitive. In Europe the utilites companies don't get away with the price rises they do here - why? well because the mug british consumer will pick up the bill EDF and others use their UK business to keep their Frnch and German customers sweet.

 

Would the last person, indeed, please turn out the lights.

 

cunts

[oman5]

Do NOT automatically go for the courtesy car option on your insurance-unless you absolutely cannot be without a car in the time it would take you to buy an old snotter- My other half's audi 90 got rear ended, we had the courtesy car, and after they'd charged us for it the payout was miniscule. they have some kind of tie in with the car hire firms and it ain't cheap. now I always tend to have a spare car knocking about somewhere, its much easier.

This whole paying through the nose for cancelling mid-term has hit me too, I bought a tidy pajero (stupidly) without realising just how piss-poor they are on diesel. sold it pretty quick, that was 80 quid to cancel after only 4 weeks.

[gtd2000]

 

This isn't capitalism, I belive in capitalism...well, human capitalism anyway - this is what happens when a complacent and lethargic customer base allows several organisations to corner essential markets in an uncompetitive way. Starts with the banks and goes on through car insurance and utilities. In the states they don't have this problem - their markets remain competitive. In Europe the utilites companies don't get away with the price rises they do here - why? well because the mug british consumer will pick up the bill EDF and others use their UK business to keep their Frnch and German customers sweet.

 

Would the last person, indeed, please turn out the lights.

 

cunts

 

I'm not sure that the USA is such a good example these days.

 

It used to be a very cheap place to live but costs over there have increased significantly, to the extent that many everyday items are actually cheaper over here in what used to be known to me as "rip off Britain".

 

Even if you compare a lot of costs in the UK to other Euro nations we often have a better deal these days, that's probably mainly due to the folks being shafted by the currency change.

 

I also know my car insurance cost is much lower here than the USA by a very large margin but that's because the US insurance covers all sorts of costs. My American friends can't believe how cheap my insurance is.

 

The Americans win on fuel costs but that's only because taxes and duties applied are lower.

 

From my perspective (and I travel very frequently) the UK is generally a relatively inexpensive place to live in the 21st century.

[gtd2000]

NMDP

[The Reverend Bluejeans]

You may as well crash and write off the Rover to get your moneys worth out of them!

 

Have you tried adding the new car on to the existing policy? I.E insure two cars at once?

 

 

An underbonnet fire helped along with a fuel leak and a match. £600 payout, car gone, insurance wankers shafted - job done.

[dollywobbler]

Can't help thinking that a lot of the tricks the insurance companies get away with are because the useless public will whinge and moan, but not actually do anything about it. If people didn't like the £30 Elephant charge and all left to go elsewhere, I can't help thinking that Elephant would have a change of heart

 

Same with the finance near-fraud. It will always be cheaper to go to your bank and say "can I have a loan to cover this insurance premium?" You'll probably get an APR of under 10%. Yet because the insurance company 'helpfully' offers their own finance when you need it, people sign their lives away for 20+%APR. Some years ago now I looked at this and said 'this is silly' and haven't used insurance co finance since. Occasionally, I'm very, very skint, but no insurance company or bank is milking in my misfortune, so I feel happy.

[The Reverend Bluejeans]

If people didn't like the £30 Elephant charge and all left to go elsewhere, I can't help thinking that Elephant would have a change of heart

 

 

Aviva did the same to me though - £30 because I changed the reg number on the same car. That's as well as charging an extra £21 a month because I moved house. They're all as bad as each other.