Recently in the UK there has been an increase in van insurance cancellations which theorists believe could have been caused by the global problems in the financial markets. It seems that business owners are scrutinising every penny they spend and every monthly cost in an effort to stay competitive.
The UK insurance market is extremely competitive with a huge amount of choice available via online quote systems. There are five or six major comparison sites offering commercial vehicle and van insurance and hundreds of smaller online brokers and direct insurers; this has not gone unnoticed by financially savvy business owners. All this choice brings new opportunities to cut costs as in some cases it makes more sense to cancel a policy and look online for a really cheap quote.
Every direct insurer and broker has their own terms covering policy cancellations although the terms offered by brokers are more standard than the individual insurers. A typical broker will charge based on a percentage sliding scale plus a fixed administrative fee.
One well known van insurance broker bases their fees on a cost of 30% for the first month and an increase of 10% every month thereafter. Finally a fee of 45 is charged to cover the administration cost. For example if a 1,000 policy is cancelled in month 2 then the total cancellation cost will be 40% plus the administrative fee. In this case the total cancellation fee is 445, meaning a refund of 555 will be issued assuming that the policy was bought in full. In the case of monthly payments it is likely that a payment must be made by the customer to the broker in order to settle any balance due.
Using the above calculation as a guide, customers can carefully consider the cost savings in getting a very cheap quote online and buying the policy from the refund from the cancelled policy. The other option is to simply reduce their monthly payments if choosing the credit option. Once the quotes are obtained it could be possible to further reduce the premium by taking off convenient extras such as an any driver clause.
The cost savings are not huge however and the highest savings will be made by small business owners who have simply renewed their premium with their current broker or insurer without first comparing prices online.
Get an online van insurance quote using multi-quote.com to see if cancelling your policy might be a viable option to lower your monthly costs.
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