Cancelling your car insurance in Britain

In Britain you are required to have your name on the car insurance certificate if you are driving a car.

Car insurance companies are nothing else but a scam industry. So when you cancel your car insurance, the broker wants you to pay a so called cancellation fee. (which I personally think should be illegal)

When you buy your car insurance you can pay for it in two ways. Either in full or in monthly instalments. Either way it’ll cost you more than your actual car insurance cost. Why?

Here is why. Unlike in other countries where the broker is paid by the insurance companies, in Britain, you the customer pays them. Meaning; an extra charge is levied on you for no reason at all. You have nothing to do with the broker other than buying the insurance from them, because you can’t buy it directly through the insurance companies.

Say, you find a price for your car insurance. The price will be 500, for an example. If you pay in full, that’ll be your price and the broker takes their fee out of it and sends the rest to the actual insurance company. This money already includes the broker’s fee, without the customer knowing it.

If you pay in monthly instalments, you make your first payment and ten monthly payments. (some brokers will have an 11 months payment plan) Now, that very first payment is the broker’s fee. In your literature or anywhere else online you will not find this information mentioned and I think that should make it illegal and a scam.

Why? Because the broker is an affiliate of the insurance company, yet you as the customer is the one paying their fee and it’s disguised  in the figures without you being aware of it.

Yet they mention the cancellation fee in their literature because that’s an extra fee the brokers wants to levy on you. The cancellation fee varies by broker,  but all of them charge this extra disgusting fee. This fee is nothing else but extra profit for them on the back end.

Many people just simply don’t pay them. They stop the direct debit payment before they call the insurance company to cancel their car insurance, thus the brokers won’t be able to take it out. You can tell them, you’ll mail it in.

What happens if you don’t pay your car insurance cancellation fee.

First they are gonna call you on the phone number you gave them when you’ve signed up with them for the car isurance. (best to use a landline number for these kinds of situations) If you answer the call they’ll ask you to pay it. If you don’t answer the call they’ll try to call you a few more times and switch to letters and calls. You might get an occasional phone call but mostly letters.

After a few months or a year the letters will be sparser and sparser and eventually they will stop and give up. It’s not going to effect your credit rating or anything. In Britain there is no central database among insurance companies and brokers.  (They loose data even in their own database).

When it’s time to go and buy another car insurance you just go online and get the cheapest rate you can and get your insurance. You might even gonna have the same insurer. (the insurance company themselves, not the broker) These are only brokers you are dealing with and there are millions of them. The insurance companies are not effected by this and even though there are only a handful of insurers, your ability to buy insurance will not be effected at all. The brokers wants to make some extra money on the side and slap the cancellation fee onto the back end of the deal.

The front end is the up front fee they charge (and I suspect the insurers might pay them something too) and the back end is the cancellation fee. We can’t do nothing against the front end fee because than we would not get the insurance we need, but the back end is ours, the consumer’s.

Car insurance business is a scam built on speculation and paranoia.

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