# Cancelling car insurance



## emc2 (27 Sep 2007)

Hi, 

I have been shopping around for car insurance and got a good quote from company A and sign up with them in the last month. I have since got a better quote from a different company. If I cancel my insurance with company A do I only get charge for One month or will I be hit with a penalty of some sorts? 

thanks
Emc2


----------



## Guest120 (27 Sep 2007)

emc2 said:


> If I cancel my insurance with company A do I only get charge for One month or will I be hit with a penalty of some sorts?


Why not ring them and ask.

Different companies will have different policies so you'll only get a definitive answer from them.


----------



## Bgirl (27 Sep 2007)

You will be charged short term rates which could overall prove an expensive option.


----------



## Ravima (27 Sep 2007)

it should be clearly spelt out in the policy document. however, as Bgirl has said, unless the differential is huge, then you are better off staying where you are this year and changing next year.


----------



## GA001 (27 Sep 2007)

As previous posters have said 'it depends' the 'standard' clauses would be:

- If cancelling within the first year - short-term rates
- If cancelling within the first year if on direct-debits - Pro-rata rates

- If cancelling anytime after the first year, pro-rata rates are 'usually' applied.


----------



## LUFC (28 Sep 2007)

Is it that much of a saving to go thru all the hassle of cancelling one policy & taking out a new one??


----------



## emc2 (28 Sep 2007)

Thanks for the help and advise, yep the difference is more than €200 so worth the effort.


----------



## Ravima (28 Sep 2007)

there is a sneaky way if you are paying in installments by direct debit. simply stop the payments, wait for insurer to cancel policy then take out new one. Be sure when taking out new one thouh to mention that a previous one was cancelled for non payment otherwise, you could find the new insurer could cancel your new policy for non disclosure


----------



## dave45040 (11 Oct 2007)

Ravima said:


> there is a sneaky way if you are paying in installments by direct debit. simply stop the payments, wait for insurer to cancel policy then take out new one. Be sure when taking out new one thouh to mention that a previous one was cancelled for non payment otherwise, you could find the new insurer could cancel your new policy for non disclosure


 
Also watch (if you do this) that the insurance company that you are cancelling with do not hold onto any No Claims Bonus that you have until you have settled any amount outstanding with them, which they would be entitled to do.


----------



## FrCrilly (12 Oct 2007)

emc2 said:


> Hi,
> 
> I have been shopping around for car insurance and got a good quote from company A and sign up with them in the last month. I have since got a better quote from a different company. If I cancel my insurance with company A do I only get charge for One month or will I be hit with a penalty of some sorts?
> 
> ...


 
Remember the following rules of NCBs.  

1. They are only recognized in discrete units (ie 1yr, 2 yr, 3yr etc) 

2. The accumulation of NCB years is only recognized in continuous time 
(eg if you have a policy for 2 yrs, break it with a few days of no insurance and then incept a policy for a further 3yrs, a new insurer will only recognize 3 yrs NCB, not 5)

3. NCBs usually expire after 2 years of being left idle. 

Combing rules 1 and 2 above, a future insurer will recognize your current 1 month as a break in insurance cover and hence you will be subject to the example in rule 2. I don’t know your NCB history, but if you have 0 yrs NCB before incepting your current policy, I think you’ve nothing to lose. However if you have a number of previous years NCB, I think you will lose them all when shopping around in the future.  

(You can always experiment on the above scenarios by ringing up an insurer as a Joe Soap). 

In relation to your refund, you’re entitled to 11 months of your premium back minus an administration charge (eg €25 to €50). 

Hope this helps


----------

