Cancelling Insurance Question

[B20EF]

I know if you cancel your car insurance to move to another broker they generally penalize you for any time remaining in your policy.

Has anyone ever sold a car and not purchased a new one? You cancel insurance because you have no car, will they still charge you a cancellation fee?

[jwslam]

"Admin fees" I've been told. No clue how much...

[wintonyk]

in my experience, when i first insured a car I paid for month 1 and month 12. The penalization I received was not being refunded the month twelve.

[Zero102]

You will likely still pay the penalty, it is calculated using something called the short rate table (IIRC), it should be listed in your policy somewhere. Basically it gives you a percentage of the policy that they retain when it is cancelled, the amount varies depending on how far into your policy you are.

[B20EF]

^My insurance company said this. They said its a better idea to keep fire and theft on the vehicle rather than cancel, it will be cheaper in the end. Even though I wont own the vehicle.

[IEatRice]

Originally posted by B20EF
^My insurance company said this. They said its a better idea to keep fire and theft on the vehicle rather than cancel, it will be cheaper in the end. Even though I wont own the vehicle.

Your better off to cancel. I would advise it's not wise to insure a vehicle you don't own.

[Masked Bandit]

The penalty your talking about is called "short rate" cancellation in the business. The closer to the start of your policy the more severe the penalty. However if you are at least nine months in the penalty is virtually nothing. It's done as a percentage of your policy value. So if your policy renewed two weeks ago you're going to get hit about 10% of your policy value. However if there's only a month to go before your renewal the penalty will be a couple of dollars.

Unfortunately for the OP, the reason you are cancelling doesn't matter. It's a one year (or six month) contract and if you want out early, it's going to cost you.

You could always just insure the new car with your existing broker and then move on renewal?

[B20EF]

Originally posted by IEatRice
Your better off to cancel. I would advise it's not wise to insure a vehicle you don't own.

The car is already registered to the new owner so I think I'll be ok, plus he's a friend.

I have a grandfathered policy I want keep so I will keep paying fire and theft. The other car I want to cancel I may do now that I know it's possibly only a few dollars cancellation fee (which is with another company I dont like).

[tom_9109]

Originally posted by B20EF


The car is already registered to the new owner so I think I'll be ok, plus he's a friend.

I have a grandfathered policy I want keep so I will keep paying fire and theft. The other car I want to cancel I may do now that I know it's possibly only a few dollars cancellation fee (which is with another company I dont like).

Whats a grandfathered policy?

[03ozwhip]

^ a grandfathered policy is something that new clients cant have but old clients that had the policy(which is usually better hence the grandfathering to further the rates) are aloowed to keep the policy until a certain time period or if they change it.

[tom_9109]

Originally posted by 03ozwhip
^ a grandfathered policy is something that new clients cant have but old clients that had the policy(which is usually better hence the grandfathering to further the rates) are aloowed to keep the policy until a certain time period or if they change it.

Don't policies run a year in length?

[B20EF]

Yes but if I cancel I will drop out of a company group rate that I have been in for 10 years. I have no affiliation with that company anymore but my insurance keeps offering me their rates, as long as i dont cancel.