Cancellation Charges

lilmanfa · 28th March 2006, 18:54

I've just been charged £45 administration for cancelling my car insurance policy with Admiral. How can they warrant this?

Loula · 28th March 2006, 19:29

Hi!

Did you pay monthly?

LOULA

Bookworm · 28th March 2006, 20:53

They can't.

Write to them and ask them why.

If it's because you cancelled early, it's a penalty charge: unlawful.
If it's to "cover their admin costs", you want to see a breakdown of the costs. If it's not a genuine pre-estimate: unlawful.

If it's one of the above, or a "just because", you tell them you want a refund or you'll see them in court.

deeian · 28th March 2006, 23:17

I've just made enquires to cancel my home/buildings insurance early and been told I will be charged a months payment as a 'cancellation'fee. Does it make any differencve that i pay monthly. Sorry to butt in, if it goes any further i'll start my own post. Ta

Bookworm · 29th March 2006, 00:28

No, it doesn't.

Same reply as above. Go for it.

BankFodder · 29th March 2006, 05:45

Could you have a look at the T&Cs to see whether or not it is included there.
If it isn't then the problem becomes very easy.
If it is included then we have to go down the penalty charge route which is a bit trickier but quite do-able

deeian · 29th March 2006, 08:42

Thanks all. Have checked T and C. It is printed on the bottom of the policy schedule
CANCELLATION CHARGE Our current cancellation charge is one month's premium.

dave · 29th March 2006, 10:12

I think for home insurance this should/could be classes as a penalty.

Motor insurance gets a little tricky, as regardless of wether or not you pay monthly, or if you cancel - the policy is still legally in force (at least as far as thrid-party goes) for the full term.

So to aska cancellation fee is not even covering their costs of the risk involved, so it probably wouldn't be seen as a penalty.

Home insurance is cancelled as and when you cancel it and the risk is no longer carried by the insurer, and therefore I would say that it's a penalty.

Loula · 30th March 2006, 09:29

If you pay monthly they cannot enforce the charge as the agreement is to pay per month (unless you have defaulted and not paid for the amount of cover you have had).

LOULA

Loula · 30th March 2006, 09:31

Sorry, hit wrong button.

Also, Insurance companies breakdown a policy into monthly segments not equally in the first year of insurance as to recoup the admin costs of setting up the policy.

If I remember rightly - 89% of first year insurance costs for motor policies goes on admin and agout 65% on Household.

Not saying they are right or lawful, just what the insurance industries stand might be.

LOULA

joneshousehold · 30th March 2006, 10:23

Just had the very same problem re car insurance. Although they say I will have to pay all future monthly payments (up to November, about £200.00 ) because I have had a claim in this insurance year. The thing that annoys me is that I bought a new car (group

and asked them for a new quote to cover it, replacing my existing group 14 car. They quoted the same premium for the group 8 as the group 14. (Part of the reason for buying the new car was to reduce costs.) When I asked why, they said it was because I had had a claim in this insurance year. I did then ask if there was a penalty for cancelling the policy and was told no. So I went and insured the new car with Direct Line at a reduced cost. Have just attempted to cancel my old policy and been told to pay up. Of course they have your notification of no claims bonus which you need for the new insurers.
Banks, insurance companies, I hate them all!!

dave · 30th March 2006, 12:53

Yes, financial institutions in this country need a bloody good shake up.

UNIQLO1087 · 11th July 2007, 13:40

I would like to cancel my insurance policy, which is with Diamond. On the back of my certificate of motor insurance it says there is an admin fee of £45 for all cancellations, I fthink this is a really high amount! What should I do? Should I write to them saying I will not pay the admin fee until they post me a breakdown, should I just pay the total amount, and also if I cancel my policy (Iam fully comp) will my car still be insured to me as thirs party fire and theft until the end of the policy term?

I would appreciate advise on this!

LemonTwist · 11th July 2007, 23:14

Quote:

Originally Posted by UNIQLO1087

I would like to cancel my insurance policy, which is with Diamond. On the back of my certificate of motor insurance it says there is an admin fee of £45 for all cancellations, I fthink this is a really high amount! What should I do? Should I write to them saying I will not pay the admin fee until they post me a breakdown, should I just pay the total amount, and also if I cancel my policy (Iam fully comp) will my car still be insured to me as thirs party fire and theft until the end of the policy term?

I would appreciate advise on this!

I don't quite understand your last question - if you cancelled your policy, then all cover would stop from the date of the cancellation and you would then be uninsured. If you only want 3rd party fire and theft cover, you should call Diamond and ask them to downgrade your policy from Comprehensive.

rudekid48 · 16th July 2007, 14:19

Quote:

Originally Posted by joneshousehold

Just had the very same problem re car insurance. Although they say I will have to pay all future monthly payments (up to November, about £200.00 ) because I have had a claim in this insurance year. The thing that annoys me is that I bought a new car (group

and asked them for a new quote to cover it, replacing my existing group 14 car. They quoted the same premium for the group 8 as the group 14. (Part of the reason for buying the new car was to reduce costs.) When I asked why, they said it was because I had had a claim in this insurance year. I did then ask if there was a penalty for cancelling the policy and was told no. So I went and insured the new car with Direct Line at a reduced cost. Have just attempted to cancel my old policy and been told to pay up. Of course they have your notification of no claims bonus which you need for the new insurers.
Banks, insurance companies, I hate them all!!

Is this a serious post? When you pay your motor insurance by DD it does not mean that it is a monthly policy. There is an annual premium due and you are simply opting to spread the cost. If you have had a claim paid out on the policy then you still have to cover the annual premium.

I understand that people get upset when they are hit with unreasonable charges but lets not get carried away. If you took out a loan for 5k over 5 years to buy a car, then sold the car after 2 years, would you therefore expect not to have to pay the rest of the loan because you no longer had the car?

Dave68 · 8th October 2007, 18:47

I have read through the posts and think I may have got confused. Can anyone advise me about my problem, please.

I have been with 1st Quote for over two years and recently sold my bike. When I cancelled my policy which I paid by monthly instalment I was not told that I would have to pay nearly 5 months premiums !!. I think this is a bit steep so I rang, partly to advise that I had shredded my certificate and also to query this charge. I was told that it is because paying monthly involves, essentially, taking a loan over 12 months to pay the premium to the insurers. They want £16 for this privilege and 1st Quote want £30 admin fee for cancelling the policy- Total £46. Apparently it is in the Terms & Conditions that they send out.

What do we think about this then and have I got any chance of reducing the amount (preferably to Zero) ? They are sending out new Terms so I can read it for myself, but it just doesn't seem right to me. I will be asking for a breakdown of the Admin charge so I can see what is involved too.

indebtstudent · 13th October 2007, 19:54

What if somebody dies? Are these charges still payable then? Knowing these companies they probably are.

And people wonder why consumers don't trust the financial services industry...

cazzaswfc · 13th October 2007, 20:53

Quote:

Originally Posted by indebtstudent

What if somebody dies? Are these charges still payable then? Knowing these companies they probably are.

And people wonder why consumers don't trust the financial services industry...

I understand your upset indebt, but please be realistic!! I don't believe any company would charge for cancelling a policy for a deceased client.
( certainly not the one i work for!)

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