Insurance Cancellation Fees

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joannehowlett

New Member
Dec 16, 2011
1
0
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Hi, I wish to change insurance companies as I have just bought a new car and my insurance company wants to charge me nearly 3 times as much as other companies. I pay by direct debit each month so was wondering why I have to pay the cancellation fee of £55? When my payments stop the company stop insuring me so why do I have an outstanding liability to them? Can they enforce this? Thanks
 
T

trickygj

Moderator
May 31, 2010
400
1
18
Cheshire
www.richardgjohnson.co.uk
joannehowlett

I pay by direct debit each month so was wondering why I have to pay the cancellation fee of £55?
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When you entered into the contract for insurance it was for car x. When you wanted to insure car y it means that the insurance contract for car x comes an end. You are effectivley cancelling your insurance. Insuarnace companies are allowed to charge a small admin fee to cover their costs. They are not allowed to make a profit from the fee though.

When my payments stop the company stop insuring me so why do I have an outstanding liability to them? Can they enforce this?
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Yes they can and the fees will no doubt be in the insurance contract documents.

You can ask for their complaint procedure if you think the fee is excessive. Ultimately you can complain to the Financial Ombudsman.
 
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