Insurance policy cancellation costs more than total original

[Bru]

Hi. I accept that one must read and agree to the terms and conditions of a policy, before accepting it. But, what I did not do was appreciate the financial reality of cancelling a (Bennetts) policy.

5 months into the policy, cancellation is regarded as being in the sixth month, so that's 80% repayment on premium. Non-refundables are legal expenses and RAC Bikeguard (I wanted to be 'safe'). Total policy cost at start: £181.60, if paid in a lump sum, or ~£207 spread over the year.

Cost of cancellation, including £30 fee, non-refundable options and 80% premium repayment, was worked out as ~£194!! And that's after five months' direct debit payments totalling £86, with £120 to go (APR bumps things up).

I cannot continue with the policy, as the bike is sold. Even though I agreed to the payments at the beginning, I really did not realise that it would cost more than the policy was worth, to cancel it halfway in. I'm stuffed! What a lesson to learn.

Confused? So am I. It may even be worth buying a wreck to transfer the insurance over to. I would rather pay another £120 than £194.

[iooi]

Look on the bright side you have saved £13 by cancelling 6 months early...

I would be tempted to make a one off payment to get rid. Not really a Bennets thing this either as the vast majority of other ins brokers do exactly the same. Best be is to always try to pay up front if they are charging the % interest. Even if it means a small bank loan or overdraft to cover.
You would have not been any better off apart from the intrest payments, but at least would have got a few £ back ratehr than a large bill still to pay.


As you say T/C reading is a real must these days, as anal as it is.... I make a living out of people who don't....
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Just because my bike was A DIVVY, does not mean i am......

[sickpup]

And what exactly is the problem of insuring a bike you no longer own?

[Bru]

According to the nice lady on the other end of the phone line, if I tried to ignore my 'responsibility', the database would automatically flag that the bike was now owned by someone different. Then, the official request for cancellation fees would be made. I did not state that I had sold the bike, just that I was considering it. However, if their database is linked to that of the DVLA, then I may well be scuppered.

[Pete.]

Why not just ask them to 'park' your policy until you buy another bike. Better-yet, find someone with an old crapper of a bike that is not on the road and transfer it over to that.
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a.k.a 'Geri'

132.9mph off and walked away. Gear is good, gear is good, gear is very very good

[sickpup]

[iooi]

Is it not a case of you can't have more than 1 ins policy on a bike....

Like you say in cases like this its crazy as, you are losing out on NCB & you are not going to claim on a bike you do not own..
But i guess it could well be a dvla/police thing as the new owner might just forget to ins the bike and it would still flag up as insured.

Perhaps you sould be able to remove the bike from the policy and let it run with no bike covered. Ins co's would still make the money and OP would get his NCB at the end of the year and maybe stay with the co rather than thinking, never using them again.....
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Just because my bike was A DIVVY, does not mean i am......

[Bru]

Philanthropy is not recognised by these institutions, I suspect. I don't know; the answer is buried somewhere in small, dense text.

[panrider_uk]

I'd just let it run and not do anything unless forced to.

Mark
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Current bikes: Honda ST1100 Pan European. Moto Guzzi V85 TT Travel

[Bru]

I cannot really claim victim status, as I was happy to take out the policy in the first place. Just astounded at the hit I'll have to take. The reality is, that the insurance company will get their year's worth of payment, regardless of how much of the year you were insured for. So much for pro-rata so-and-so.

I have a friend looking for a heap for me. I mean, if I'm going to pay this, then I may as well get something out of it. Like calling the RAC again and again..

[Cannon]

Has someone on here got a rolling chassis in the garage you could swap it over to for 6 months ?
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Staffs Riders Forum

[sickpup]

[stinkwheel]

This has caught people out on here before.

The main problem, although it may not have been explained that way, is that by paying for the polkicy in "installments", you are actually entering into a credit agreement with the brokers.

So Bennetts bought the policy, then they loaned you the money to pay for it on a monthly repayment scheme.

You really have to watch this sort of shit. I recall someone got totally taken up the arse by this one. Cancelled the policy, the broker cashed in the remainder of the policy and continued to charge the monthly fee. They didn't have a leg to stand on and landed up having to pay it all off as well as the policy on their new bike.

Think of it as like a hire purchase agreement. If you buy something on HP then break it, you still have to make the payments.

I think one person got round this because he was 17 when he took out the policy. I believe this was something of a legal grey area, while it wasn't directly illegal to enter into a credit agreement with someone under 18, such an agreement couldn't be held to be binding.
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“Rule one: Always stick around for one more drink. That's when things happen. That's when you find out everything you want to know.”
I did the 2010 Round Britain Rally on my 350 Bullet. 89 landmarks, 3 months, 9,500 miles.

[drunkensod]

[nrml76]

I had a similar problem when I sold my bike. I told them that if they expected me to pay extra to cancel my policy, I would rather keep it running. After a bit of bickering, they agreed to cancel it for the amount still left on the policy. What is the problem with insuring a bike you are not the owner of, apart from a claim landing on your policy because the other parties involved were not insured?
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Everyone who lives dies, yet not everyone who dies has lived. We take these risks not to escape life, but to prevent life from escaping us.

[Bru]

Thank you. I will take all your comments onboard, and wait for the insurers to get on to me (or not).

[mistergixer]

You can transfer it onto my TDR250 if you like - it's in pieces in the garage and i doubt it will get built up in the foreseeable future (due to my extreme laziness).

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Space Monkey #7
Don Eladio is dead. His capos are dead. You have no one left to fight for. Fill your pockets and leave in peace. Or fight me and die!
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[Cannon]

See told you someone would have a frame etc you could use
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Staffs Riders Forum

[St0rmer66]

I had the same problem with Bennetts and after kicking up a stink with the underwritten company (Equity Red Star I believe) I managed to get a £62 refund. But I wasn't paying monthly so your mileage may vary.

They lost my custom for the next bike and all years coming as I don't even bother ringing them for a quote. Also lost my mate and my dad too plus anyone else who will listen .
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:: Honda XR 125 L ('53) => Kawasaki GPZ 500S ('02) => Suzuki SV650S ('00) => Aprilia RSV-R ('51) ::

[chris-red]