Insurance Cancellation Fee seems high? Is this normal?

[piman2k]

Hi all

There's a good chance that H15 will go to a new home on Saturday so I thought I'd find out from Sky about cancelling the insurance.

I paid for my policy in full on September 1st at a cost of £450. I've just been issued with a cancellation quote of £237 after only 6 weeks.

Sky's cancellation fee is £50 and I've used 6 weeks (say 2 months) of insurance (£75), but that still leaves near enough £90 unaccounted for, i.e. with the insurer.

Is that normal or is that steep? I don't cancel policies regularly but it seems steep to me. Edit - plus, why am I paying a cancellation/admin fee to Sky AND my insurer?

Any guidance is appreciated.

Thanks

Ryan

(Edited for bad maths!)

[-ghost-]

Does seem a tad high that.



No doubt there will be some tiny small print somewhere saying there is a fee 50p fee for the amount of keys and clicks they have to do on the computer or something stupid.



can you transfer it to another car or partners car ?

[edthesparky]

seems a bit high.. I insured my bmw in june for 350. cancelled it yesterday and got back 135. 50 quid cancellation fee the same as yours

[Mark]

Read your policy booklet there is probably a section that tells you how much you get back if you cancel.

[Jonny Wilkinson]

You're getting hit with double cancellation fees. Brokers plus Underwriters.

A lot of the cost for the broker lies in finding the best policy for you and setting up the policy. They minimise the cost to you so as to be competitive then penalise you for cancelling the policy because they have done the work and then are, usually, moving your business elsewhere.

The cost for the underwriter is in working out the premium, issuing paperwork (usually), notifying the MIB, arranging finance (unless you pay annually) and bundling and passing on the risk as financial instruments. They work out the average admin cost, not your specific admin cost, and charge a fee based on that.

All of that is an upfront cost to the insurer and broker so what happens when you cancel is they take the premium you paid, take off the upfront costs, take off a proportion of the premium to account for the number of days they actually carried the risk of insuring your car then take off a fee for processing the cancellation including working out the refund, issuing paperwork (usually), notifying the MIB, cancelling finance (unless you pay annually) and adjusting the bundled risk in the financial instruments.

What is left is your refund (or charge if you pay monthly).

Almost all the above costs are fixed costs i.e. they don't vary according to the premium so with a relatively small premium like 450 quid, the charges are going to be a bigger proportion of the original premium.

Having said all that, £200 does seem a bit steep.

[R3K1355]

You can take the case up with the ombudsman if you like, they usually side with the policy holder and cut the charges right down.

[piman2k]

Well, it's 4 weeks into it and still no refund. Sky advising 4 to 6 weeks to get a refund is pretty poor, by both them and MarkerStudy. I haven't bothered taking up the excessive fees because frankly I can't be bothered with the arguing

[Pete C]

I once was asked to pay for cancelling my policy a month before it was due to expire because I'd sold the car

[Davus200]

Could be worth speaking to your bank if haven't already...

I was getting messed around for about a month by a company, kept promising my refund but too no aval.. Spoke to my bank, said they'd sort it and had my money back into my account within a couple of hours

[piman2k]

It's funny. I recently moved house and updated my Ibiza's details with them. They just charged me £21 extra premium and a £25 Admin fee for the privilege.

But here we are, SIX WEEKS on and the refund for my 200SX still isn't in my account.

[Jonny Wilkinson]

You should have told them to take the money out of what they owed you

[docwra]

Did you do it by installments? Sometimes the credit company (that you may not even know are involved) have some pretty steep penalties for early termination of contract

[piman2k]

No I did a lump sum. Always do to avoid credit charges. The whole thing makes no sense. If I did do it by installments and all these mystery fees applied, would I get an invoice demanding they are paid? Nope.

[-ghost-]

Im having the same problem moved to a much better postcode and they wanted to charge me 100 quid more with admin fee which would have taken it to £580. so I go to cancel and you guessed it £118 to cancel.

id already checked it on the computer and after I had a phone around got it for £265 so I paid the cancellation fee but they refunded in the 5 days

I dont see how they are allowed to do it it seems insurance companies can pretty much write the rules with no way around it.