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Motor Insuarance Cancellation Fees

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I am changing my vehicle on Thursday and the insurance company after re-newing the policy in October.

 

They are not competetive for the new car so am going to change companues.

 

They say they are going to charge me admin cancellation fees and for loss of commission, is this right?

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I am changing my vehicle on Thursday and the insurance company after re-newing the policy in October.

 

They are not competetive for the new car so am going to change companues.

 

They say they are going to charge me admin cancellation fees and for loss of commission, is this right?

 

About right as they took the risk. We had the same earlier this year and decided it was easier to pay the difference as the updated policy will only last until the current one finishes, i.e. if there were only 5 months on the current one, then the updated or upgraded policy will expire in 5 months time and not 1 year from now.

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I understand what you say but the policy renewed in October so they have carried the risk for 5 weeks which has been paid for

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If you went through a broker, then the total price is made up of the insurance policy fee plus a %age for the broker. If you cancel then the total brokerage fee is payable PLUS a %age of the insurance policy which will be far greater than simply calculating the weeks cost pro rata.

 

So lets say for example the policy cost £400 and the broker got another £100 on top. your total price was £500 which is the price you were quoted and accepted.

 

Now you want to cancel after 5 weeks, but the insurance company can charge say for 3 months (as this is their minimum cover period). You therefore owe them £400/4 = £100 plus you have to pay the full £100 broker fee and maybe on top of that you are charged £35 cancellation fee.

 

So your total charge for the 5 weeks cover would be £235! which to you appears to be nearly 50% of the total yearly cover.

 

I would look again at trying to pay the uplift for the new car and move the policy next year when you are due to renew.

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