What is Discount Recovery when cancelling car insurance premium after 4months

[colly1978]

I wonder can anyone give me a bit of advice.

I sold my car and got a work vehicle.

I began my car insurance payments (monthly) in April; also paid May, June, July and August instalments.
I cancelled my premium last week and I knew there was a £50 cancellation fee I had to pay which is fair enough.
But Im also being charged £34 for discount recovery, can anyone explain to me what this charge is and should I argue that im willing to pay the £50 but not the £34.

My premium was approx. £350 for 12 months ive already paid them £29.50 x 5 = £147.50 and also the £50 = £197.50
I need to check but I think I paid a deposit.

Basically am I required by law to pay it, I just have never came across this before and have changed or cancelled policies plenty of times in the past

Many Thanks

Colly1978

[Johnboy007]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

I would say that the discount is the amount that the insurance company gave you on condition you kept 12 months insurance.
As you have terminated early, they are claiming the discount back again.
Anyhow, that's how I see it.
Give your insurance company a call and ask them to explain it.

[colly1978]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

I will do Thanks

[des8]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Besides the description that JB gave it could be a commission grab back by the broker, if one was involved.
When a year's insurance is agreed, if a broker is involved, he will be paid his full commission on the year's premium.
If that policy is cancelled mid term, the insurance company will require a portion of that original commission repaid.
It is not unknown for the broker's T&Cs to require the client to repay that amount, as well as a cancellation fee, plus the shortfall between annual and short term premium rates.

I have never heard the term "discount recovery" previously, so that is a bit of a guess.

I wonder if the deal contained a "vehicle recovery" insurance which was at a discount for effecting an annual policy

[des8]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Further to my earlier post:
Or they could have used a portion of their commission to discount your premiums & want the discount back as they will have to return it to the insurers.

[righty]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

The term is meaningless. It's another novel way that insurers use to fleece the consumer

Don't phone, write & ask them to explain in detail what the charge is for I did & they didn't respond when challenged. They haven't attempted to demand it since

[Johnboy007]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

The term is meaningless. It's another novel way that insurers use to fleece the consumer

Don't phone, write & ask them to explain in detail what the charge is for I did & they didn't respond when challenged. They haven't attempted to demand it since

Maybe the insurance that colley had is different to yours.
Better to ask them now, than ignore it and get it passed to debt collectors.
Just my opinion.

[colly1978]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Thanks for your replies, I will look at the T&C's again tonight to see if I can find anything relating to this charge and if I do I will give them a ring tomorrow and just ask them the question

[colly1978]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Just realised my car insurance documents on the desk in my office.

It says on their t&c's "if we give a discount at the inception of your policy, and the policy is subsequently cancelled, we shall be entitled to reduce the amount of any refund to enable us to reclaim the unused portion of the discount. The service charges we make may change from time to time"

What is annoying me is that when I was taking the insurance out in April they were slightly more expensive than a few others and to keep my business they reduced the cost and in doing so are now wanting the discount, surely that is unfair? Or am I reading into this wrongly?

Thanks

Colly

[Johnboy007]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Just realised my car insurance documents on the desk in my office.

It says on their t&c's "if we give a discount at the inception of your policy, and the policy is subsequently cancelled, we shall be entitled to reduce the amount of any refund to enable us to reclaim the unused portion of the discount. The service charges we make may change from time to time"

What is annoying me is that when I was taking the insurance out in April they were slightly more expensive than a few others and to keep my business they reduced the cost and in doing so are now wanting the discount, surely that is unfair? Or am I reading into this wrongly?

Thanks

Colly

Well my friend it looks as if I was correct in my assumption that it was indeed a discount given at the start of your policy.
As regarding whether it is fair, perhaps the insurance company would ask if it was fair you cancelling your insurance policy early?
So it looks as if they are just asking for the excess discount for the remaining time left on the policy.

[colly1978]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Well my friend People do change cars or their circumstances change, and this is not scheduled by your start/finish date of your insurance, its the fact they gave me the discount to enable them to keep my premium when I had a lower offer at the time of renewing

Well my friend it looks as if I was correct in my assumption that it was indeed a discount given at the start of your policy.
As regarding whether it is fair, perhaps the insurance company would ask if it was fair you cancelling your insurance policy early?
So it looks as if they are just asking for the excess discount for the remaining time left on the policy.

[Johnboy007]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

Well my friend People do change cars or their circumstances change, and this is not scheduled by your start/finish date of your insurance, its the fact they gave me the discount to enable them to keep my premium when I had a lower offer at the time of renewing

Hi,
I'm sorry that you had to pay more for your insurance.........

[righty]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

If that's what it is why not write in plain English such as "we are reducing your refund by deducting a portion of the original discount which was based on your retaining the policy for 1 year"

[righty]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

However, they cannot penalize you if there is no loss to them. Ask them to justify their deduction

[des8]

Re: What is Discount Recovery when cancelling car insurance premium after 4months

To be fair this is normal practice if the insurance is obtained through an intermediary.
The broker has rebated part of his commission to get the business
When you cancel the insurance company will require the broker to return the commission that was paid to the broker at inception.
As the broker had passed some of that commission to you as a discount it is only right that you return " the unused portion of the discount".