Cool off period?

[Arghh]

 

There would normally not be a charge for cancelling within this period (although looking at the posts above it would appear some companies are still trying it on) and many insurers will in fact give you a full refund providing no claim is made.

If you end up paying for time on risk, then this is simple to calculate.

 

Annual premium, Divided by 365, multiplied by the days cover used.

 

E.G if you paid £500 a year and used 6 days cover you would owe £8.22 (500/365 = £1.37 per day, * 6 days is £8.22)

 

So unless your annual premium is £1885, then you're probably being charged a cancellation fee, either that or they cant add up!

 

 

DA

 

 

Hi there,

 

 

Unfortunately a pro-rata charge isn't always the minimum `time on risk` charge from insurers. They each seem to have their own fees which can often be just round figures such as `£25`, but the odd ones do issue a full return premium within the 14day cooling off period. However, it is the norm to have administration fees from brokers, which will also be applied, so don't think you're going to get 14days free insurance until you find a better quote!

 

Basically, the cooling-off period doesn't guarantee a full refund, it just works out cheaper to cancel within that time, as outside of that time the insurers often only refund a percentage of the insurance depending on how many months of the policy have been used.

I.e - after 1 month the policy holder will only get 75% of the premium back, 2 months = 50%...etc.

 

Note: Careful of taking out optional extras offered by your broker such as legal cover and breakdown as these are often by different companies to the underwriters you are using for your main policy, which means that outside 14days of the inception date these may be non-refundable and won't always be included in the calculations for the percentages/ pro-rata charges at the time of cancellation.

 

Also, paying a years insurance on monthly direct debits is usually entering into a yearly credit agreement, which will mean that if you happen to cancel the policy part-way through you are breaking the agreement, which will incur further administration fees from them plus whatever interest you may be liable for.

- Paying on monthly installments is NOT the same as paying for each month as you go along, therefore you won't have the right to just cancel free of charge after you've made that particular months payment.

 

All I can suggest really given the variation of fees with each different company is to READ THE TERMS AND CONDITIONS before you take out the policy. All cancellation fees WILL be stated in policy booklets, and don't forget about the fees from the brokers (usually on the back/ last pages of the policy as these charges will ALSO apply), and also check the finance agreement conditions if that how you've chosen to pay.

 

Just make sure you know what you're getting yourselves into.

 

Scary stuff! Lol.

[Phil3822]

This topic was closed on 09 March 2019.

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