I took out insurance in February with MCE. Paying monthly installments

through finsure. The total cost for insurance was £873. I have paid up

until the 9th of september when i cancelled the policy. I have recieved

a letter demanding a cancellation charge of £397. I have been told i

must pay or they will send people round etc. also i cant have my proof

of no claims until i have paid which will frick up my current

insurance.

the T&C of the policy says there may be an outstanding balance if you have not paid enough to cover cancellation charges.

their reasoning is that they have recieved a £50 refund from finsure

and i now have to stump up the balance for the insurance i have

received which is £397.

2 questions.

is it legal for them to withold proof of no claims after i have cancelled a policy

is it legal for them to charge me this much

thanks

Ok I assume you took out the policy on 9th Feb, so that means you paid half of the total premium of £873, which comes to £437, less the £50 discount you mentioned to get £383 (so about the figure they are asking).

The question of whether it is legal, unfortunately, depends on exactly what it was that you signed up for. If the policy was for a year's cover (no matter by what method you chose to pay) then you have signed a contract for exactly that. Cancelling can therefore incur a charge because you have broken a contract. Many insurers will refund a portion of the remaining premium because it can often be in their interest for a policyholder to cancel (quite complicated to explain, I only will if people are interested), but this is voluntary and not compulsory.

I'm not sure about the NCD with-holding tho. It sounds dodgy for sure, but as NCD is only dealt with in whole years it might be likely that their thinking is if you didn't take out a whole year's worth of cover then you didn't accrue anymore NCD (and if you pay the remaining amount then they are willing to give it to you because you've paid for it even if you haven't technically received it). NCD's all a bit murky anyhow.

Why did you cancel the policy?