Insurance company wanting full years of payments for 2 monthes insurance

[lee2006]

Hi

 

Im not sure if im right or wrong so hopefully someone can point me in the right direction.

 

I bought a quad last year and got it insured via mce, after 2 monthes i missed a payment which im sure they took out on a differnt date to what i agreed but i need statements to check. anyway, they sent me a letter saying as i missed a payment they was cancelling my policy, that wasnt a problem for me as i decided to sell the quad so i could get a motorbike anyway, now there sending me letters threatening court if i dont pay for the while year, i would understand if i had to pay some kind of cancellation fee, but why should i pay a while year when all i got was 2 months worth.

[Darkangelsdelite]

Generally speaking, the only time you would be liable for the whole years premium is if you had made a fault claim during the contractual year, as you haven't mentioned this i assume this isn't the case. In which case the only advice i can offer is to check the terms and conditions of your contract, look under cancellation and fee's etc and see what the terms for you canceling the policy are. Also might be worth giving them a quick call to find out why they are asking for the full premium as it could just be a simple admin error.

[Rob S]

It is usual for motor policies to be taken out for a year. If they are cancelled within that period it is normal for insurers to charge short term rates. I think most companies will charge about 20% of the annual premium for 1 months cover and it rises by 10% increments or thereabouts until about 8 months. Any cancellation after 8 months will not result in a refund of policy. It is not uncommon for insurers these days to put on an admin charge on top of their short term rates either.

 

You will need to review any documentation that you have to see if there is anything in the T's & C's which will help you.

[cityfan]

Your best option is to call them and ask them to explain and give a breakdown of charges. I would also check your policy wording. Sometimes a policy is sold on a "minimum & deposit" basis (meaning no refunds due and full premium must be paid whatever). This doesn't usually apply to vehicle policies because people chop and change all the time, so it is suprising they are chasing you for the full amount.

 

Alternatively, it may be the premium finance company haven't had a return from the insurance company yet, so the balance is still outstanding. Start with the insurance company (not the broker) and ask if there was a return premium and how much it was, this gets paid to the broker. (Note:no return will be given if you've had a claim). The broker will have set up your premium finance (the direct debit), and will need to return the return premium to them, then you will be liable for whatever is left.