A few weeks ago my car suffered a major engine problem which meant it was not viable to repair it, so I decided to simply go down the new car route. Everything was covered, from servicing, insurance and so on therefore I decided to cancel all my running cost's for my old car. I phoned my insurance company, The AA whom I was paying monthly installments to and explained I no longer required my insurance and they explained there was a balance of £80 owing from me.
Unsure why, I questioned it and was told that The AA gave all customers a 2 month grace period on payments at the beginning of the policy although on checking I confirmed only 1 month grace period was actually given. When I phoned back I was then told that I was actually charged a fee of £50 with the remaining balance of £30 being the amount they hadn't charged me at the beginning. Still confused I asked what the £50 covered and was told it was because The AA had already paid my insurance on my behalf and required re-compensating because of it.
When I put it to the rep that I had paid a considerable amount of my insurance as opposed to someone having only paid a months insurance they agreed in both circumstances a similar amount would be charged.
OK, let's do the maths then:
ME AFTER MAKING 6 PAYMENTS
Paid £241.44 of a £427.43 premium, leaving a balance of £185.99
ANYONE ELSE AFTER MAKING 1 PAYMENT
Paid approx £42 deposit of a £427.43 premium, leaving a balance of £385.43
So, despite having already paid £241.44 towards my premium The AA are asking me to pay £30 which is apparently to cover the cost of the month's insurance already received together with a £50 charge. The interesting thing is, if I cancelled after only 15 days I would still be asked to pay a £50 fee but would likely receive a credit or at the very least not have to pay anything extra as I already paid a deposit and haven't yet received my "1 month" grace period.
The whole point in my argument with them is simple - if I'm apparently being asked to pay back the amount The AA have already paid for my insurance, why is it that someone had paid less than 1 month would be asked to settle less than me after having paid for 6 months?. I think we can all guess the answer to this one, it's simply a case of we're not paying for the insurance The AA has already paid for, we're simply paying a substantial fee to cancel our insurance which is by it's definition illegal as it then becomes a penalty charge!.
These were the points I sent to The AA, although they have since declined to respond although they have the ability not to respond, just in the same way I have the ability to publish this matter on this and other sites to let people see for themselves that insurance companies, no matter how friendly are only interested in dealing with you and taking your money when things go their way, and when you decide you no longer need their services they will milk you anyway and get as much from you as possible - heaven forbid you should mess up their trading forecasts or anything!.
More interesting reading on car insurance ... http://www.drivingbb.com/stark-truth-car-i...ou-off-t91.html
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