Cancelling even a discount car insurance policy can be costly

Motor car insurance customers recently received warnings that deciding to cancel their policy mid-term can runs the risk of incurring heavy financial losses.

Omotola Akerele recently revealed to MSN Money that many insurance customers, even customers with relatively discount car insurance, will be in for a surprise if they cancel their existing policies with the expectation that they will be reimbursed for a portion of the premium that would apply to the period of time remaining on their policies.

Ms Akerele instead pointed out that many car insurance groups decide instead to employ refund calculations on the basis of a short-term rate system as opposed to pro-rating the remainder.

The short-term rates employed by car insurance companies could lead to several costly situations, Ms Akerele continued, giving examples of how cancelling your policy in the third month may only net a consumer half of their annual premium returned; cancelling at the six month mark could return only 20 per cent, while in some situations cancelling in the 11th, 10th, or 9th month could result in no reimbursement whatsoever.

In other news motor insurance head of insurance price comparison website Will Thomas recently remarked that many UK consumers may face higher car insurance premiums in the not-so-distant future, thanks to several new Euro zone regulations which may be introduced that could drastically alter the landscape of the insurance market in Britain.

Mr Thomas also cautioned that any rules that could prevent car insurance providers from using gender of their consumers as a factor in generating car insurance rates could negatively impact the insurance market as a whole; industry experts predict that if such a regulation were indeed put into place, even discount car insurance policy premiums would rise across the board as a result.

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