Many car insurance providers now offer a so called “cooling off period” where a customer has chance to change their mind about a policy.
However, it has just come to my attention that cancelling your car insurance policy within this agreed time frame isn’t necessarily free of charge, as you may find yourself with a cancellation fee.
Car Insurance Cooling Off Period
Take one customer for example, who decided to take out a policy with a car insurance company who will remain nameless.
He decided to sign up for 12 months of cover, safe in the knowledge that he was covered by a 14 day cooling off period where his money would be refunded if the policy was cancelled.
Well, it turned out the application process wasn’t smooth, and when the certificate of insurance was received from the company by email it was basically unreadable. Rather than complain or waste anymore time, this customer decided enough was enough and he would just activate the cooling off period.
No problem said the company, and they quickly refunded the 12 month premium which had already been charged.
A £74 Cancellation Fee
This would have been the end of the story and the two parties would have parted as friends, but the following week when checking his bank statement the customer noticed a charge of £74 had been grabbed out of his account. There was no mention of what it was for, so he decided to call up and find out.
According to the car insurance company it was a cancellation fee, which included a £49.99 set up fee and £24.14 for time on cover…which was less than 24 hours.
Now I’m no mathematician, but if you are being charged £24.14 for a days cover then 12 months of cover would work out at £8811. This is roughly 10 times more than an average policy, and makes you wonder why this company is charging so much for less than 24 hours of cover? I’m sure the customer was charged nowhere near that for 12 months of cover.
Not only that, but the customer claims that during the application process it didn’t say anything about set up fees or cancellation fees, and that in his opinion, he has been unfairly charged.
Car Insurance Complaint? Go to the FOS
I have to agree, and if you ask me he should take the matter to the Financial Ombudsman Service, or FOS for short, where an official will decide whether or not this person has been treated fairly.
In my opinion, this whole matter could have been avoided completely if the customer started with a well known comparison website such as this one, where he could have got over 100 quotes from trusted companies.
Trusted Car Insurance Companies
Who knows…maybe he did visit Cheap Car Insurance after cooling off and then found the perfect insurer for his needs…one who sent him a readable certificate of insurance and isn’t going to charge any unexpected fees.