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Thread: Cancelling car insurance - Termination fee

  1. #1
    Craftsman
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    Cancelling car insurance - Termination fee

    I renewed the insurance on my RS4 last month and decided this time to put it on monthly payments as I was planning on selling the car and would cancel it after a few weeks.

    A company called Go Skippy came back the cheapest and even with their early termination fee (£75) I decided to go ahead.
    Anyway I have just called them today to cancel the insurance as I have got a cheaper policy on my new car which is starting Monday and they have advised me there is £191 to pay to cancel it, £75 is the termination fee plus £50 admin fee. The person on the phone was likely from an Indian call centre and could not give me a breakdown on the fees or other info but surely this cant be right?

    When cancelling in the past there has only been about £50 to pay with other companies.

    Does anyone have experience with this, what would happen if I just cancelled the direct debit? surely they would cancel the insurance due to me not paying?

    This months payment has been processed today so essentially June is paid for and the car is going on Monday.

    Annoying as there clearly having a laugh trying to charge £191 to end a policy early!

  2. #2
    Craftsman
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    What does your contract say ?

  3. #3
    Master blackal's Avatar
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    Quote Originally Posted by GC2012 View Post
    I renewed the insurance on my RS4 last month and decided this time to put it on monthly payments as I was planning on selling the car and would cancel it after a few weeks.

    A company called Go Skippy came back the cheapest and even with their early termination fee (£75) I decided to go ahead.
    Anyway I have just called them today to cancel the insurance as I have got a cheaper policy on my new car which is starting Monday and they have advised me there is £191 to pay to cancel it, £75 is the termination fee plus £50 admin fee. The person on the phone was likely from an Indian call centre and could not give me a breakdown on the fees or other info but surely this cant be right?

    When cancelling in the past there has only been about £50 to pay with other companies.

    Does anyone have experience with this, what would happen if I just cancelled the direct debit? surely they would cancel the insurance due to me not paying?

    This months payment has been processed today so essentially June is paid for and the car is going on Monday.

    Annoying as there clearly having a laugh trying to charge £191 to end a policy early!
    If you don’t cancel and the new owner or anyone else has an accident that results in a 3rd party claim - then your insurer is on the hook for costs.

    They then seek to recover as much of that - from you.

    You could take that chance, I guess...................

  4. #4
    Master
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    Is the new/cheaper policy for the next car £191 cheaper, if not can you just change it over? That does seem excessive to cancel but maybe that’s why they cheap in the first place.

  5. #5
    Master darrenw's Avatar
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    I’ve had this before. I can’t remember the exact detail or legal position, but I seem to recall that the fee needs to be ‘reasonable’ else you can take it up with the insurance ombudsman who take a dim view of insurers taking the micky.

    And by reasonable, it has to be demonstrably justifiable. So if your annual premium was £500 and you cancelled after a month, £190 would be unjustified.

    I raised a formal complaint with my insurer and said I’d take it up with the ombudsman unless they revised. They don’t want that sort of hassle (lots of admin) so they pretty quickly backed down. There was still the admin fee, but that was justified.

    Good luck !


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  6. #6
    Craftsman
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    Thanks for the info everyone.

    They quoted me £661 for the year where as Admiral can do it for approx £400, even if the figure was similar I would prefer to change than back down to them.

    I was paying approx £50 per month so £191 is not really reasonable, I will look in to it legally further and see if they can bring the figure down at all.


    Cheers

  7. #7
    Grand Master Onelasttime's Avatar
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    There's probably something in the T&Cs about having to pay the first 3 months if you cancel before then?

    I know it doesn't help, but if I was buying a new policy that I knew I'd be cancelling within a few weeks I would have checked the T&Cs very carefully before pushing the button. Insurers are in it to make money, no matter how unscrupulous the methods.

  8. #8
    Master darrenw's Avatar
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    Referencing this might help when talking to your insurers...

    https://www.financial-ombudsman.org..../insurance.htm


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  9. #9
    Craftsman Kris's Avatar
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    Quote Originally Posted by Onelasttime View Post
    There's probably something in the T&Cs about having to pay the first 3 months if you cancel before then?

    I know it doesn't help, but if I was buying a new policy that I knew I'd be cancelling within a few weeks I would have checked the T&Cs very carefully before pushing the button. Insurers are in it to make money, no matter how unscrupulous the methods.
    Unscrupulous ? oh you mean like taking out a 1 year policy in the knowledge that you will be cancelling it within a couple of months ? Yes, I can see that being the insurers fault.

  10. #10
    Quote Originally Posted by Kris View Post
    Unscrupulous ? oh you mean like taking out a 1 year policy in the knowledge that you will be cancelling it within a couple of months ? Yes, I can see that being the insurers fault.
    Harsh but true.

  11. #11
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    Quote Originally Posted by Kris View Post
    Unscrupulous ? oh you mean like taking out a 1 year policy in the knowledge that you will be cancelling it within a couple of months ? Yes, I can see that being the insurers fault.
    What is the alternative?

    I checked temporary insurance before proceeding and that came back at close to £150 per week!

  12. #12
    Quote Originally Posted by GC2012 View Post
    What is the alternative?

    I checked temporary insurance before proceeding and that came back at close to £150 per week!
    They don't offer the product you want, your problem, not theirs.

  13. #13
    Go Skippy aren’t the best of insurers. They’re a bit dodge to say the least.

  14. #14
    Grand Master Onelasttime's Avatar
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    Quote Originally Posted by Kris View Post
    Unscrupulous ? oh you mean like taking out a 1 year policy in the knowledge that you will be cancelling it within a couple of months ? Yes, I can see that being the insurers fault.
    He’s paid for the time he was insured and was prepared to pay the stated termination fee so what’s the problem? The insurer is now trying to claim back nearly 6 months payment for 1 month.

    The insurance business is set up specifically to be inflexible for no other reason than it can, and to make a lot of money for doing very little.

    Are you seriously defending the insurance companies, who enjoy a captive market, where the consumer has little or no choice? Bizarre!

  15. #15
    Grand Master Onelasttime's Avatar
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    Quote Originally Posted by Kingstepper View Post
    They don't offer the product you want, your problem, not theirs.
    Why don’t they offer a fair price for a fairly common insurance situation?

    Why is this thread turning into an insurance company love-in?

  16. #16
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    Quote Originally Posted by Onelasttime View Post
    Why don’t they offer a fair price for a fairly common insurance situation?

    Why is this thread turning into an insurance company love-in?
    Thanks.

    To be honest I thought £75 was steep but at the time needed the insurance ASAP and proceeded.
    I didn’t expect there to be additional admin fees and god knows what else on top.

    I remember cancelling years ago when I sold a car and Admiral charged me about £50, simple and easily done.

  17. #17
    Quote Originally Posted by Onelasttime View Post
    Why don’t they offer a fair price for a fairly common insurance situation?

    Why is this thread turning into an insurance company love-in?
    I don't know, their business model, their decision.

    Not a love-in at all, just unrealistic expectations by consumers. There's no right for a company to do business with anyone.

  18. #18
    Master
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    Check the policy paperwork on cancellation, some companies when you do it monthly just finance it out so your actually taking a yearly loan out agains the premium which can come back and bite you in the arse in situations like this as there’s early termination fees before the admin charges.


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  19. #19
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    Aviva Plus has no cancellation fee. It’s whole design is to be a more modern form of insurance. You pay monthly and I believe can just cancel as and when

  20. #20
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    Quote Originally Posted by Onelasttime View Post
    There's probably something in the T&Cs about having to pay the first 3 months if you cancel before then?

    I know it doesn't help, but if I was buying a new policy that I knew I'd be cancelling within a few weeks I would have checked the T&Cs very carefully before pushing the button. Insurers are in it to make money, no matter how unscrupulous the methods.
    I always check the T&Cs with a toothcomb. Motor insurance companies can vary on many things but household insurance is a minefield. The amount of exclusion clauses relating to wristwatch theft and loss is enormous.

    To be honest, anyone who does not read through the T&Cs (which only takes 15 minutes) must be a bloody fool.

  21. #21
    Have you complicated it by entering into a credit agreement and part of the charge is to finish that?

  22. #22
    You could try telling them you have bought a McLaren F1 or something they won't cover - or added a supercharger that way they might cancel the insurance on you then be prorata.

  23. #23
    Master PhilipK's Avatar
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    Quote Originally Posted by GC2012 View Post
    Does anyone have experience with this, what would happen if I just cancelled the direct debit? surely they would cancel the insurance due to me not paying?
    And presumably the next time you're looking for insurance, you would need to answer the question "Have you ever had insurance cancelled or refused?" as Yes, which may have an impact.

    Not defending the car insurance business, but my understanding is that it's not especially profitable - between the very fierce competition, customers who only tend to buy on price (aided by comparison web sites) and very high payouts if somebody is maimed or killed. Hence the tendency to add lots of "admin" charges.

  24. #24
    Craftsman Kris's Avatar
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    Quote Originally Posted by Onelasttime View Post
    He’s paid for the time he was insured and was prepared to pay the stated termination fee so what’s the problem? The insurer is now trying to claim back nearly 6 months payment for 1 month.

    The insurance business is set up specifically to be inflexible for no other reason than it can, and to make a lot of money for doing very little.

    Are you seriously defending the insurance companies, who enjoy a captive market, where the consumer has little or no choice? Bizarre!
    The premium charged was calculated on the risk being spread across 1 year. Short term policies carry a higher risk of incident, a statistically modelled lower level of care taken by the drivers etc. It's one reason why the cost of insuring a hire car is so much.

    No different really than finance companies charging an early repayment fee if you pay back the loan earlier than originally agreed.

    Insurance works on the fundamental premis of "utmost good faith", i.e both sides being truthful and laying out the terms for the agreement. Insurers do this in their policy document which sets out all terms and conditions etc. They rely on the insured being equally honest and transparent, which, often doesn't happen.

    I've said this before and its still true. Insurers do not make a lot of money on car insurance. Other areas of the market are more profitable. The profit in motor insurance comes from the sale of ancillary products such as legal cover, breakdown membership etc etc.

  25. #25
    Master blackal's Avatar
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    It certainly isn’t a captive market, with so many underwriters competing for business.

    A bit like saying that Toothpaste manufacturers have a captive market - because we all need their product.

    Looking for the cheapest policy? There can be pitfalls to that - it is up to the individual to review the policy prior to deciding it is the right one for them.

    So - unless you are willing to gamble that there will not be a claim against an un-cancelled policy you have, then you should abide by the terms of the policy - and cancel it when it no longer applies. Nothing wrong with trying to negotiate the termination fee lower - but I wouldn’t hold my breath.

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