cancellation charge

[tina08]

My boyfriend has recently bought a new car and we found cheaper insurance with another company (his existing company wanted to charge us £2,000 where we could get it for £400 for like for like cover- go figure!!!) they then told us to cancel mid term it would cost over £200 has anyone got any advice on what we can do....does this sound right? please help!!!

[Hobbie]

tina, have you any policy documents also how long has the policy been established for?

[tina08]

yes he has all his docs the advisor told me it was in the policy booklet he has been with them for about 3 or 4 years when i asked if there was anything they could do to keep his business they practically laughed at me!!!

[LemonTwist]

Which insurer is this? £200 does seem rather high for a cancellation fee - you are probably being charged "short term rates".

I know you said the policy has been going for 3 or 4 years, but how long is it since the last renewal date?

[Money Grabber]

Hi ive had almost the same thing with Echo insurance, i took out a policy, a mth later changed banks and forgot to set up the DD. Called told them what happened. But they then cancelled my policy and now want to charge me over £200 fee. Is this right?

[Darkangelsdelite]

Tina, has your boyfriend had a fault claim since his last renewal, it could be that the policy is being cancelled on a no-return basis.

Other than that, i agree with the rest of the guys on here, that £200 does seem quite high for a cancellation fee.

Some companies will charge a flat rate for cancelling, others will charge a months premium.
Also if he has legal cover then there's not normally a refund given for that and also if he has breakdown cover then there's probably as cancellation charge for that or, if he's used it, that could also be cancelled no-return.
If you post back with more info i.e the insurer, how he pays for the policy (presumably its direct debit) and roughly how much he pays (then we might be able to calculate what the charge should roughly be) then we should be able to help further.

In regards to money grabber, i would guess that your policy was probably cancelled for non-payment and the outstanding balance is probably for the time you had on cover that you didn't pay for.


DA

	The Direct Debit Guarantee • The Guarantee is offered by all Banks and Building Societies that take part in the Direct Debit Scheme. The efficiency and security of the Scheme is monitored and protected by your own Bank or Building Society. • If the amounts to be paid or the payment dates change, we will notify you three working days in advance of your account being debited or as otherwise agreed. • If an error is made by us or by your Bank or Building Society, you are guaranteed a full and immediate refund from your branch of the amount paid. • You can cancel a Direct Debit at any time by writing your Bank or Building Society. Please also send a copy of your letter to us. This is a term of your banking contract and you can sue on it.

[tina08]

Hi
it's budget insurance, 2 months since the renewal date in March and no claims or use of the breakdown he's never had to claim in past years either. they said it was short term and bcos they were a broker. it's a third of his total premium for the whole year it just seems so much!!

[tina08]

oops he also pays £52 a month at the mo the total being £620 inc intrest

[Darkangelsdelite]

I've just had a quick look at budgets website Car Insurance, Home Insurance, Van Insurance, Motorcycle Insurance - Budget Insurance

and it does state there's a cancellation fee, but it doesn't clarify how much it is, it simply refers to the policy documentation.
If you can find a copy of your documents, it should say in there how they calculate their cancellation charges. It'll probably be worked out on a sliding scale, so the longer the policy is in force, the less refund you get etc.

I still think that £200 sounds unreasonable for cancelling a policy after 2 months cover. If you cant find it on your documents, it might be worth giving budget a quick call and asking them where abouts it explains it and also ask them to send you a breakdown of how they came to that figure in writing.

DA

[tina08]

thanks that's been really helpful i think i might write a letter of my own to them as well!!!!!

[Darkangelsdelite]

No problems. Let us know how you get on and if you need anything else feel free to ask .

DA

[cresswell80]

the £200 will prob include transfer to "short term cover" - much higher premiums. should be a £35 cancellation fee.

[dazedandconfused22]

Hi, I work for an insurance company, and our cancellation fee is between £30 and £35... If you pay on a monthly basis, you tend to pay in arrears for the payments, and so you could be charged right up until cancellation for time on cover... but £200 is a bit excessive!!

[BankFodder]

If you have agreed to a cancellation fee not no fee or method of calculation has been set out at the time of entering into the agreement then they may only charge a reasonable fee. Supply og Goods and Service Act 1982 - s.15, I think

There are rules similar to this in the new CPUT regs http://www.consumeractiongroup.co.uk...r-trading.html as well.

I suggest that you pay the money because if you don't these people will simply inform the CRAs and then your life will be murder.

Pay it under protest and then go and sue them for the money back and settle for a reasonable fee.
At the same time complain to the OFT under CPUT because these people need to be prevented from this kind of practice. Millions of people are faced with this ripoff all of the time.
Have you had a look at the industry code of practice? It may be contrary to that a well which is another CPUT breach

	Consumer Protection from Unfair Trading Regs 2008 Follow this link to our CPUT entry in the library. Using CPUT you can complain to Trading Standards about Unfair Commercial Practices. Complaining under CPUT is easy to do. It costs no money and carries no risk. However, you may also need to bring your own direct action to produce a solution to your own problem or to get compensation.