cancelling car insurance (ipswich insurance)

[razorc]

hi wonder if anyone can help me , i took out car insurance and paid it monthly , but cancelled it 7 months into it , phoned them up to cancel it i was told i would need to pay the rest of the year's premium , i said no as i didnt need it anymore

but was told i had to pay £160 to clear it . I refuse to pay it and ended up with CCJ for £197


can they make you pay the rest of the year's premium if cancelled serveral months into if you pay it in monthly instalments

no claim was made on my policy

[Trojan1401]

Hi RazorC,

Please read your policy carefully.

Generally under a personal lines policy there will be a cancellation clause. If this was the first year of the policy then short period rates would apply which are usually based on a percentage of the annual premium.

If as it appears, you entered the 8th month then I'm afraid the full premium is due. This is standard across the industry.

Under FSA guidelines, when you took out the policy, the documentation & policy itself should show the cancellation guidelines.

I'm afraid they are correct.

[Rob S]

It has amused for me such a long time that the motor insurance companies can operate in such a way. This amusement was heightened when I moved house in March and cancelled my home contents insurance. I was paying by monthly instalments and all I had to do was cancel my direct debit and inform the insurance company of the cancellation of the policy. There was no demand for me to pay short term rates in the way the motor insurers do. My partner had an identical experience when she cancelled her home contents policy. The question that has to be asked is if the home contents insurers allow a cancellation midterm and are happy to apply pro rata rates then why can't the motor insurers?

[razorc]

feckers thats all i can say , thanks for the info from both of you's , its a disgrace that companies can away with this crap when cancelling , what if it was them who cancelled it due to late payment , would the feckers stil chase you for the remaining months due on it

probs yes a take it

[dave]

The difference is that motor policies are issued for a full year (under law), so if you paid by direct debit and only paid say the first month - you are still covered (up to the minumum requirements of the law) by the insurance company for the rest of that policy year.

Wheras home insurance is not bound by the law - it's your choice (or in the case of buildings insurance your mortgage companies choice), wheras motor insurance isn't your choice and is compulsory.

It's crap I agree, but that's the reason, because they HAVE to insure you for a full 12 month once you have entered into the contract, they are legally allowed to charge for it, even if you cancel. Even a cancelled policy is in force to the minumum of the law until the year is up.

[razorc]

thnak Dave for your info , i phoned them up and have decided to pay it , they said they would update my credit file saying its paid when i pay it back