Page 1 of Cancelling my car insurance, need advice, maybe a solicitor? is this legal?!

Right….
I re-insured my car insurance just over a month ago. I pay by direct debit, a total of £1800 over the year, but now I've just sold my car. The reason it was so expensive was the car (M3 Evo 3.2, and modified).

I decided that for the time being Id go without a car and use my girlfriends, an old Diesel M Reg Peugeot. My insurance kindly quoted £1200 for the year!! Bear in mind I've NEVER had any points, and have no accidents or anything!!!

I was gutted, so rang around some other companies and was quoted less than £300 squid for a year! Sorted I thought.

I asked to cancel my insurance and they said I'd have to pay around £1200 even though I've only insured with them for a month!!

I asked why so high? They basically said commission to them and the finance company, and that's it, if I don't pay it they'll take me to court! (Yeah right - it would cost them more to take me to court!).

I've checked my policy with regards to cancellations, and it DOES say I would be charged to cancel my policy not proportional to a months worth of direct debit, but it does NOT state any sort of percentage, or give any indication of what the charge would be.

So my question is this. is this legal for them to just "make up a figure" of what I owe?

I have tried to speak to a manager a number of times, but they "promise" to call me but never do!!!

Is this my punishment for owning a fast car!?

It might be your "punishment" for having to use dodgy insurance companies who are the only ones prepared to insure fast cars! It does sound like they`re trying to screw you. Unfortunately I don`t know legalese, hope someone can offer some assistance!

M3 Evo.... Luck git ;-)

Time to get your policy out and give it a really good read. Most policies have a clause which allow the insurance company to claw back some extra premium back if you cancel early, but there is nearly always a stepping policy - eg. if you cancel in the first month you get 90% back, second month 75%, third month 50% etc. If you`re cancelling the insurance in the first few months you should certainly be able to recover more of the money than you seem to be suggesting.

If it`s four or more months into the policy then you`re less likely to get very much back.

Basically there`s no point talking about it until you`ve had your policy on the table and found out what the REAL damage is.

Most companies have short term rates so when you cancel they revert to them but it does sound a bit like you have been stuffed. Are they members of the ABI. If they are try contacting them to see if their rates conform to guidlines.

They don`t have to take you to court ........ if you don`t pay they will tell all their mates ..... then where will you get insured.

Okay Deano, I just pulled out the policy on my bike.

"Cancellation:

You may cancel this insurance at any time by telling us in writing and sending back your certificate of motor insurance...

Period of cover Percentage of refund
up to 1 month 75%
up to 2 months 62.5%
up to 3 months 50%
up to 4 months 37.5%"

etc. etc.

I would imagine that`s pretty standard wording, in which case you should be looking at a refund of 62.5% of your initial premium, which is about £1125 by the looks of things.

To be honest, any policy which makes you much pay more than that would probably fall foul of the Unfair Contract Terms Act anyway.

As a postscript, it sounds like you`re paying by Direct Debit, in which case I guess it`d be £150 a month, of which you`ve probably paid £300 already. In that case, despite getting rid of the car, you`d still owe *them* £375 8-( !!!!

This item was edited on Wednesday, 13th November 2002, 23:33

Maybe your old car should have been `stolen`!!

Cheers for the advice!
I'm going to try and get hold of a manager today (I'm not getting off the phone until they do this time!)

I read the policy last night, and got a few others to read it as well. There's nothing in there about percentages of what I'd get back, it's worded "we apply a short term cancellation charge which are not proportionate to the annual premium" blah… blah… blah.

Dan, I would of thought something like you were saying in terms of percentages, I was expecting I owed them about £400 - £500 which I would be prepared to pay although I don't own the car, and that's a bummer, but I understand I would get charged something! But what they're asking is "stupid.. just stupid" (as the car insurance advert goes!).

Ok, all sorted, if anyone is interested!!??

Dan you are the man! You guessed about right (I owe them just under £350) basically I spoke to a manager, who is going to give her staff a slap - they got it wrong!!

I know its not the best thing having to pay that much for a car I no longer own, but whatever car I get insured with them will cost me over a grand because of the way the policy is "designed"!!! Even if I bought an A reg 1 litre Fiesta worth £50!!! How stupid is that? So I HAD to cancel.

Although Neal73- I know what you mean, if it had of been "stolen" I would've made a hell of a lot of money, but being honest as usual means you end up paying the price!!!

Always nice to be right ;-)

Bear in mind if your car was `stolen` your insurance on the *next* vehicle would be far higher - even if it was a £50 fiesta...