Car insurance cancellation fee alot higher than expected

[Sinister84]

Hi, I am going to cancel my car insurance as I have found it cheaper else where, I’m currently paying £3120 a year (£260 on the 16th of the month) I have found it for £1160 a year. I phoned up my current insurer and asked them what I would be charged to cancel, they told me it would be £467.19p to cancel surely this can’t be right, the bloke on the phone assured me that it was the correct fee and was nothing he or I could do about it and said if I needed to I could pay it off monthly over 2 years with no interest. Just wondering if this seems correct and if not what I should do about it.

 

Thanks, Steven.

[Sinister84]

Just to add, I am with One Call insurance. I have had the policy since September 2015 and also have a compulsory excess of £3000 with this company too.

[honeybee13]

Hello and welcome to CAG.

 

What does your policy document say about cancellation fees please?

 

HB

[JoeyJoeC]

Wow £3120 is a lot to pay as it is, I have had a 20 month ban and mines under £1000.

 

It will depend on your cancellation terms, £400 to cancel sounds about right for a policy that expensive. For mine with Fresh insurance, if I cancel within 6 months, I only get back 50%. I think you're lucky.

[renegadeimp]

One call is the worst out there. They make their business off the charges.

[JoeyJoeC]

One call is the worst out there. They make their business off the charges.

 

Isn't that how all businesses make money?

[renegadeimp]

Not to the extent this company does

[unclebulgaria67]

Ask for a full written breakdown of the cancellation amount. The cancellation terms should be stated in your insurance documents.

 

Sometimes if you have taken out extra cover options such as legal protection, you have to pay the full year, even If you cancel early. Then add on top cancellation admin fees and any time on risk. On a £3k premium, it might add up to £400. But do get the calculation in writing.

[unclebulgaria67]

Remember that if you feel that any admin fees are not justified and are unfair, you can make a formal complaint and if necessary then make a complaint to the FOS. While the FOS are looking into it, which might take months, Onecall would not be able to chase you for payment. Then if the FOS did not uphold your complaint, advising that the admin fees were fair, you could make payment arrangements. Sometimes Insurance companies faced with a FOS complaint decide to waive admin fees, because if a complaint is taken forward with the FOS, they would have to pay FOS fees which make it not financially worth it.

[Sinister84]

Hi and thanks for the replies, the only document I have ever recieved from One Call is my policy which says nothing in it at all about cancellations, their website doesn't seem to say much either but what it does say if i'm being honest I don't really understand as there seems to be a few fees for the same thing and nothing that would ammount to what I'm being charged.

 

Thanks Steven

[Sinister84]

Spoke to them with the online chat service about a breakdown, got told this

 

Thanks Steven. Unfortunately I can't issue a breakdown of costs since we work cancellation costs on a calculator that takes several factors into account. This is largely worked our by the amount you've paid, the amount you owe and the time you have had on risk.

 

After this I asked If I could have this above sent to me so I have some sort of evidence and he told me no and just to screen shot it.

[unclebulgaria67]

Hi and thanks for the replies, the only document I have ever recieved from One Call is my policy which says nothing in it at all about cancellations, their website doesn't seem to say much either but what it does say if i'm being honest I don't really understand as there seems to be a few fees for the same thing and nothing that would ammount to what I'm being charged.

 

Thanks Steven

 

Include this in your written complaint. Don't phone them as they will fob you off.

 

We find that some posters to this site will add their complaints on here, but don't follow it through with companies. They will just pay amounts, because they can't be bothered writing letters. Due to modern communication methods, people have forgotten how to write letters. There is no template letter available.

 

The letter needed is straightforward. That you wish to dispute the cancellation sum requested, as it does not appear justifiable or stated in any of the policy documents issued. That you wish this matter to be treated as a formal complaint for FOS purposes and require a full breakdown of the cancellation charges to be sent to you in writing, with details of where the cancellation fees are stated in the policy contract documents issued.

[Sinister84]

Thank you, going to phone them now and arrange cancellation now and I will the go ahead with the formal complaint.

[unclebulgaria67]

Thank you, going to phone them now and arrange cancellation now and I will the go ahead with the formal complaint.

 

They may tell you that you can't cancel without an arrangement to pay cancellation amount. This is not true and us not treating customers fairly. Then can cancel and just leave the amount outstanding to be dealt with, once your complaint has been addressed.

 

Make sure you cancel any Direct Debit with your Bank and make sure you tell them that they cannot take payment using any account or card details they might have.

[Sinister84]

I'm on their website no and have found the cancellation part but I can't see where it would ammount to what they are asking for?

 

We do not provide suspension of cover. If the policy is cancelled we apply the scale below. A fee of £40 will be

applied to cancellations. If you cancel the policy prior to cover commencing we will not make a charge for the policy

and the £40 fee will not apply.

 

Cancellation Period % of Premium we will refund

Up to 14 days on cover Pro-rata Refund

15 days up to 1 month on cover 75%

Up to 2 months on cover 60%

Up to 3 months on cover 50%

Up to 4 months on cover 35%

Up to 6 months on cover 25%

Up to 8 months on cover 10%

Over 8 months on cover 0%

 

You may cancel the policy at any other time by returning the Certificate of Motor Insurance. Provided that no claim

has been made by you, or has not been made against you during the current Period of Insurance, we will refund a

proportion of any premium paid by you for the Period of Insurance still remaining in accordance with the scale

above. Please note under the Road Traffic Act it is an offence not to surrender the Certificate of Motor Insurance

within seven days of the cancellation date.

Should your car be stolen and/or deemed to be a total loss your Policy will be cancelled without prior notice by

writing to your last known address and we will deduct any outstanding premium owed from any payment to you. If

a claim has been made, we may cancel your cover but not refund any premium. If you are paying by installments,

you must still pay us the balance of the full annual premium.

We, the Underwriters or Your broker have the right to cancel Your Policy at any time by giving You seven days’

notice in writing where there is an exceptional or valid reason for doing so. Full details of the exceptional or valid

reasons for cancellation can be found in the main policy booklet. We will refund a proportion of any premium paid

by You for the Period of Insurance still remaining in accordance with the table above. The cancellation letter will be

sent to the latest address We have for You and will set out the reason for cancellation.

If You are paying Your insurance by premium finance instalments or other similar payment method, cancelling the

direct debit instruction does not mean you have cancelled the Policy.

This policy shall be cancellable by the Company without refund of any premium in the event that, whether in regard

to this policy or any other policy, any sums of money payable by you to the Company, by way of Excess or

otherwise, are left outstanding after demand.

[Sinister84]

Sorry for all these posts.

 

Phoned them just now and changed the cancellation date to an earlier day (the 9th instead of the 15th) new quote is £418.95p the lady on the phone did give me a breakdown but I couldn't catch it all and asked her to send me out a full breakdown which she said she would once I have sent the cancellation email and/or letter back to them. There was an admin fee of £50 and the rest was for the ammount of cover I have had, this is what I don't understand as I pay for it monthly so paid £260 the day I took the policy out and then the same each month on the 16th so I am not sure how I owe them money unless it's the rest of the money for the full policy, which if so doesn't work out with the 7 months I have left on the policy? 7 x 260?

Again, sorry for all the post but I'm just so confused over it all.

 

Thanks for the help, Steven.

[unclebulgaria67]

Those cancellations details should have been sent with the policy.

 

It is quite easy. They look at how many months you had cover, apply the relevant percentage refund to the account. They then compare it with the payments you have made, which leaves an amount left owing, plus the £40 admin fee. I say easy, but i cannot calculate it, from what they have told you.

 

Ask for a breakdown calculation in writing and ask why cancellation terms were never sent with the policy documents.

[Sinister84]

Thank you I will, sorry don't mean to act dumb but

 

"It is quite easy. They look at how many months you had cover, apply the relevant percentage refund to the account. They then compare it with the payments you have made, which leaves an amount left owing, plus the £40 adminicon fee."

 

This is what I don't understand, what is the ammount owing, not monies but what it's actually for, if you know what I mean? I'm just not very good at all with this type of stuff as you can see haha.

[unclebulgaria67]

If you have had the policy for 5 months, they want to charge you 75% of the annual premium.

 

Did you pay a deposit premium upfront ? Normally you pay about 2 months upfront.

[Sinister84]

Thanks for clearing that up.

I'm not 100% sure but I recall paying £339 at the beginning.

[unclebulgaria67]

I don't think those cancellation terms you found online are those that apply to you. I have done a calculation and you would would owe more based on those.

 

Plus those terms are out of date as since last October it is no longer a legal requirement to return certificate of insurance on cancellation.

[Sinister84]

Sorry I have just checked my bank statements and I didn't pay a big deposit it was just a normal payment that continued at the same ammount every month, the £336 was the ammount it went up when I moved in with my partner and changed adress.

 

I'll just have to wait and see for when they send me a full breakdown and go from there, they have told me I can pay it interest free over 24 months from what I can figure out it seems I'm going to have to pay it. Thanks for all your help and i'll update when I hear from them with the breakdown.

 

Thank you, Steven.