Every car insurance policy will be subject to short term rates in the first year of insurance. This is a penalty imposed by the insurer if you cancel before the 12 months of cover are up. A typical example would be as follows:

Period of cover - % of premium that will be refunded
Up to 7 days -         85%
Up to 14 days -       80%
Up to 1 month -      75%
Up to 2 months -    60%
Up to 3 months -    50%
Up to 4 months -    35%
Up to 6 months -    25%
Up to 8 months -    10%
Over 8 months -      0 %

So, as you see, if you cancel after 6 months you only get 25% (not 50%) of your money back.

Why do insurers do this?
It’s simple. Insurers dont want someone taking out a policy for a month, then cancelling and starting again one month later and so on. Shorth term rates have become the standard practice in year 1 with any insurer.

What refund should I get if I am in year 2, 3, 4, 5 etc with an insurer?
Short term rates will normally only apply in the first year. After that you will normally get a pro-rata refund. So if you cancel 6 months into the term you should get 50% of your renewal premium back (less the broker admin fee, if applicable).

Is there any way around it?
If you do need to cancel your policy in the first year of insurance and you have a genuine reason, I would suggest writing a letter to your broker or insurer outlining your (hardluck!) story and asking them to help you out. If you are with a good broker and you have a genuine reason then you should get it sorted.

 

The easyquote team are on hand to help all our existing clients and we aim to provide the best level of service. Log on to www.easyquote.ie or call us on 1890-399-999.

 

 

 

Every insurance policy has detailed terms and conditions which vary from insurer to insurer. Each company may change the terms, conditions and benefits of their insurance policies on a weekly or monthly basis. Please refer to your policy document and schedule for full details of cover.

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