Insurance Factory Cancellation Fee

[Hm9119]

Hi,

I would really like some advice

I've been with my car insurance company (the insurance factory) for 14 months. After my policy was renewed and my cooling off period was complete, I realised I could get a better an cheaper policy elsewhere. I rang the insurance factory to cancel my policy, now they want £205 pound as a cancellation fee. Can I dispute this as this figure does not seem fair to me. Any advice would be much appreciated

[bhg481]

You should have been given a list of charges when you got your policy. Mine, for instance, quotes £40 as a cancellation fee plus a pro-rata charge for the length of time you've held the policy.
You didn't say how much your policy cost in the first place.

[ummmm]

So what happens if you sell or scrap your car before the policy is up?

[hc4361]

As I understand it you have to pay the cancellation fee to the insurance company PLUS up to £75 plus 10% of refunded premium to the broker (The Insurance Factory)

http://www.insurancefactory.co.uk/terms-of-business/

[hc4361]

ummmm, it would be the same, even if you were in an non-fault accident and the car was written off.
You buy insurance for 12 months and the price is based on that, even if you pay monthly.

[ummmm]

I've never cancelled mid policy before. I did swap cars once and was charged £15 but the policy didn't increase. I've always paid annually.

[bhg481]

Using the link from hc4361, if your policy cost you £1500 for the year and you're cancelling after 2 months, you are due a rebate of 5/6 of £1500 = £1250.
The cancellation costs would be (up to ) £75 + 10% of £1250 = £200.

Does this fit in with what you actually paid?

[hc4361]

Don't forget the cancellation fee to the actual insurance company which of course isn't specified as it varies so much in addition to your calculations, bhg

[bhg481]

I've never cancelled a policy hc4361, so I expected the charges I calculated being what would be charged. Reading the conditions again you are absolutely right. It really is very expensive to cancel a policy, especially if you go via a broker.

[Hm9119]

What if I cancelled my direct debit???

[hc4361]

They will write to you asking for payment in full, with added charges for bounced direct debits. If you don't pay they will take further action which could result in a County Court Judgement against you and lots of additional charges and fees.

[SirOracle]

An Insurance contract has been effected by you for 12 months....you have broken the contract......end of story.

If you had purchased eg a washing machine for say £400,and then found another retailer selling the same machine for £300 would you expect a rebate of £100 from the first retailer ?