Many motorists believe it’s easier to choose car insurance based on a factor of price. They use Internet comparison websites to see which company offers the lowest premium for their personal circumstances, make a payment then sit back to enjoy compete peace of mind while thinking about how they are going to spend that lovely spare cash. The reality is somewhat different; there are often hidden costs attached to a car insurance policy that cover specific incidents for all named policyholders. There are a number of important things that drivers need look out for to make sure the true cost of coverage has been properly compared.
Which Money Magazine recently completed a survey and found that two-thirds of car insurance companies charge an additional fee for cancelling a policy. Rather than refunding car insurance premiums that were made in lieu, the average car insurance cancellation fee was set at £40, although some providers charged considerably more. Some providers choose not use a flat cancellation fee and instead, they use systems that refund premiums at a disproportionate rate. If a policyholder cancels their car insurance coverage halfway through a one-year deal, only 20% of the premium is refunded and if the policy has less than three months to run, they might not get any money back at all. It’s difficult to establish how an individual car insurance company might implement cancelation charges but if you are already aware that your current policy won’t be needed for an entire year, you can pretty much guarantee that a penalty charge will be applied.