Bennets/C.A.R.S. DCA cancellation fee punative?

[woolfie]

I cancelled my motorcycle insurance last August two months after renewal. Bennets sent me a letter demanding payment of £118.28 which i havent paid. This has now been handed to C.A.R.S. DCA who have presumably purchased the debt.

 

I can afford to pay it but I feel that the charge for cancellation is punative in nature and I am curious as to the opinions of others on the forum. Let me elaborate:-

 

I wonder if insurance cancellation could be seen as an unfair charge? After all once you have cancelled your insurance then they are no longer providing a service. Is the cancellation charge not just for breach of contract, i.e. you have signed a contract to take insurance for one year and you are breaking the contract by cancelling early? Should the charge not just reflect the actual cost of them cancelling the insurance?

 

I may be way off here but I would love to hear what you think!

 

Cheers

 

W

[xrchris]

List of Bennetts charges noted on their website

3. What will you have to pay us for our services?

 

Cancellation Fee

 

If you cancel your policy at anytime you will be charged a fee of £30.00

Administration Fee

 

Certain policy amendments are subject to a £20.00 administration fee.

Payment Default Fee

 

If we need to resubmit a request for payment to your bank you will have to pay a £20.00 payment default fee.

 

And a list of their cancellation rates here as noted on page 9 of the policy booklet

Months Percentage of your

on cover premium you must pay

1 month 30%

2 months 30%

3months 40%

4months 50%

5months 60%

6months 70%

7months 80%

8months 90%

9months 100%

We will not give you a refund if we provide over 8 months cover.

 

I assume you are paying by direct debit, did you just cancel the direct debit and assume the policy was cancelled or did you notify Benetts first?

[woolfie]

I notified Bennets as well as cancelling the direct debit.

[Rob S]

Insurers have always had the short term cancellation rates and in the old days it probably did take a fair bit to set up a policy in terms of the time taken by the clerks to do it. But its all done by computer now so you have to question whether the rates they are charging nowadays bear any relation to the actual costs they incur when a policy is cancelled before the normal expiry date.

 

It would probably do no harm to write to Bennetts and ask them for a full breakdown of their costs and how they arrived at the figure.

[xrchris]

It can be worked out - what was your annual premium?

[woolfie]

I know what you are saying Rob but if the rates were an actual reflection of the cost to the insurance company to cancel then why would the cancellation charge increase the longer the policy has been inforce? (Not expecting you to answer this Rob more thinking outloud)

 

I will do as you suggest and write to them.

 

I suppose my reason for this is that since finding this site i dont trust any large institution when they tell me I 'must' pay!!

[woolfie]

It can be worked out - what was your annual premium?

 

 

£251.58 including greenflag type cover and personal accident cover.

[xrchris]

I know what you are saying Rob but if the rates were an actual reflection of the cost to the insurance company to cancel then why would the cancellation charge increase the longer the policy has been inforce?

 

Is that referring to the list of charges i posted above?

[woolfie]

It is indeed but probably includes the admin charges.