Automotive

TD insurance cancellation fees - Is this even legal?

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  • Jul 12th, 2018 8:05 pm
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[OP]
Jr. Member
May 14, 2007
134 posts
5 upvotes

TD insurance cancellation fees - Is this even legal?

I have a yearly insurance policy with TD that is up for its renewal on March 3rd. I am moving on May 1st to Vancouver. I call them to advise them of this and they tell me that I will incur a penalty fee for breaking the contract and that there is no way around it since TD doesn't have car insurance in BC.

This makes no sense to me. Why am I paying a cancellation fee when I am telling them ahead of time that I am moving and doing so before the policy is renewed. They offer no monthly policies, just yearly ones that they make extra money on whenever someone moves.

And they know I cannot get around the fee since I cannot drive a car legally without insurance. There's basically nothing I can do.

I have a hard time understanding how this is legal. It's completely unfair and unjustified. I think all I can do at this point is write to them and tell them what I think.
39 replies
Deal Addict
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Aug 21, 2009
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Are you sure you are cancelling the policy on the day it expires and not the days/months before?

If the latter, it would make sense for the cancellation fees.
Member
Dec 31, 2012
264 posts
7 upvotes
ST. JOHN'S
Lovable wrote:
Feb 2nd, 2013 1:27 pm
Are you sure you are cancelling the policy on the day it expires and not the days/months before?

If the latter, it would make sense for the cancellation fees.
I think he wants to cancel May1st. I am sure if he were to cancel March there would be no cancellation fee.

He basically doesn't know what to do in between March and May. Very weird situation, especially since insurance is compulsory in Ontario. Is there such a thing as monthly insurance?
Newbie
Jan 11, 2013
13 posts
can't you switch to a insurance provider that provides insurance in BC? just shop around and tell them your situation.
Deal Fanatic
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Jul 12, 2003
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Markham
From my understanding, your insurance policy is a year term contract. Then of course if you cancel before 1 year, they entitle to charge cancellation fee. I could be wrong....
Retired Forum Moderator February 2009 - June 2015
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Feb 9, 2003
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Langley
Just change on march 3 to a provider that has monthly policies.

Or maybe get ICBC insurance now and drive with it before the move. But I think the car has to be inspected first.
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Jun 26, 2007
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???
in my experience they always say you will get a cancelation fee but when the time comes to actually canceling nothing ever happens.
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Nov 12, 2004
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Hometown
"I have a yearly insurance policy with TD that is up for its renewal on March 3rd. I am moving on May 1st to Vancouver. I call them to advise them of this and they tell me that I will incur a penalty fee for breaking the contract and that there is no way around it since TD doesn't have car insurance in BC."

Ummm aren't they the ones who are "cancelling" the policy? If it were me I would be calling their inhouse Ombudsman and saying I really really really want to keep my coverage when I move but since your company can't do that why should I be punished with an extra fee. Stress the part where it is THEM that is letting you down by THEM not being authorized to continue covering you after you move... If that doesn't work go to the Ombudsman for the Industry at the website below. Just remember to keep mentioning how disappointed you are that they are letting you down by not being able to cover your additional insurance needs when you move to B.C. Never say you have to cancel, because then the person on the other end will just start reading the script they have for cancelling.

http://www.ibc.ca/en/consumer_protection/Ontario.asp
Deal Guru
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Mar 8, 2002
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GTA
How much is the cancellation charge? How much is your monthly insurance?

Is it possible for you to go without a vehicle for two months? Maybe you could find an alternative ( parents car for example).
_______________

( ͡° ͜ʖ ͡°)
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Aug 20, 2007
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Kitchener
the op's policy is effective from March 3d 2013 to March 3rd 2014, since he is cancelling effective May 1, he is technically cancelling the the policy before it expires. If he was to cancel effective March 3rd then there would be no cancellation fee since the new term wouldn't be effective yet. Not sure why you think you shouldn't pay a fee, just because you called in not advising it doesn't change the fact that your cancelling 2 months in to annual term.

@vaportech.. all insurance companies charge a cancellation fee. But it is actually called a short rate cancellation, this means that when you cancel they keep a % of the premium that they are returning to you. The % varies by company but must be approved by the regulator. The reason it doesn't seem that they actually charge anything is that they don't have a specific cancellation amount but rather keep a % of the refund. Its never shown on the policy though. For example, you cancel your policy and based on your payments have a refund of $180, but due to the short rate %, you only get a refund of $160. Nothing shows up as -20 for short rate but its how it works.
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Aug 11, 2008
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Ontario
most companies offer 6 or 12 month policies. If you cancel mid term, you will have to pay for any unearned premium. This means that if you cancel your policy May 1/13, 2 months after the renewal date, you will still owe for time on risk.... do you think they should give you 2 months free insurance?

PascalT wrote:
Feb 2nd, 2013 1:15 pm
I have a yearly insurance policy with TD that is up for its renewal on March 3rd. I am moving on May 1st to Vancouver. I call them to advise them of this and they tell me that I will incur a penalty fee for breaking the contract and that there is no way around it since TD doesn't have car insurance in BC.

This makes no sense to me. Why am I paying a cancellation fee when I am telling them ahead of time that I am moving and doing so before the policy is renewed. They offer no monthly policies, just yearly ones that they make extra money on whenever someone moves.

And they know I cannot get around the fee since I cannot drive a car legally without insurance. There's basically nothing I can do.

I have a hard time understanding how this is legal. It's completely unfair and unjustified. I think all I can do at this point is write to them and tell them what I think.
RIBO LICENCED INSURANCE BROKER, over 30 years experience
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Aug 11, 2008
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no, buddy would be the one cancelling it because he doesn't need any coverage in ontario after May 1/13 so he would have to cancel the policy 2 months after the renewal date.
Canuck2fan wrote:
Feb 2nd, 2013 7:24 pm
"I have a yearly insurance policy with TD that is up for its renewal on March 3rd. I am moving on May 1st to Vancouver. I call them to advise them of this and they tell me that I will incur a penalty fee for breaking the contract and that there is no way around it since TD doesn't have car insurance in BC."

Ummm aren't they the ones who are "cancelling" the policy? If it were me I would be calling their inhouse Ombudsman and saying I really really really want to keep my coverage when I move but since your company can't do that why should I be punished with an extra fee. Stress the part where it is THEM that is letting you down by THEM not being authorized to continue covering you after you move... If that doesn't work go to the Ombudsman for the Industry at the website below. Just remember to keep mentioning how disappointed you are that they are letting you down by not being able to cover your additional insurance needs when you move to B.C. Never say you have to cancel, because then the person on the other end will just start reading the script they have for cancelling.

http://www.ibc.ca/en/consumer_protection/Ontario.asp
RIBO LICENCED INSURANCE BROKER, over 30 years experience
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Aug 11, 2008
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they just charge you for time on risk
cancelling mid term generates a smaller return premium and usually has a outstanding premium owing for that time on risk

vaportech wrote:
Feb 2nd, 2013 3:40 pm
in my experience they always say you will get a cancelation fee but when the time comes to actually canceling nothing ever happens.
RIBO LICENCED INSURANCE BROKER, over 30 years experience
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Nov 12, 2004
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Hometown
peelhic wrote:
Feb 2nd, 2013 9:55 pm
the op's policy is effective from March 3d 2013 to March 3rd 2014, since he is cancelling effective May 1, he is technically cancelling the the policy before it expires. If he was to cancel effective March 3rd then there would be no cancellation fee since the new term wouldn't be effective yet. Not sure why you think you shouldn't pay a fee, just because you called in not advising it doesn't change the fact that your cancelling 2 months in to annual term.
It is actually a matter of perception.... I would frame any discussion with the company in the light that it is THEIR FAILURE to be able to continue to cover him because they don't have the authority to operate in B.C. If he is willing to continue coverage with TD after he moves why should he be punished because they can't offer insurance legally there? I would argue to the Ombudsman that they are the ones denying him coverage because of his new location... The pinheads who work at insurance companies use word games, all the time to get out of paying claims why not try using one back on them to get out of paying a bogus penalty?

Cosmic 5 "no, buddy would be the one cancelling it because he doesn't need any coverage in ontario after May 1/13 so he would have to cancel the policy 2 months after the renewal date."

So TD which is an international banking/insurance company wouldn't be able to transfer his policy to another province where they do have the authority to insure autos without a penalty? If they have that ability, then to punish a policy holder (which they told the op they were going to do) because they couldn't in B.C. seems unfair doesn't it not? BTW if their rep was wrong and the OP won't be charged a "penalty" then they should up their training for reps LOL.
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Aug 20, 2007
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Kitchener
Wow, canuck2fan, So based on your logic, if you move to a location where Rogers does not provide cable service, and have to move to cogeco its Rogers fault and they should not charge you a cancellation fee if one so existed on your contract? Is it Rogers "FAILURE" to provide services in that area? Your logic is so flawed that its incredible that you would even blame the company in this case. BC is a government insurance province, meaning that there are no companies in the province providing basic coverage other the ICBC. So it isn't TD's failure but rather a provincial regulation that does not allow them to provide basic coverage to drivers. Regardless of the province though insurance companies can not transfer policies around, even if they have operations in those provinces due to significant differences in provincial regulations.
Canuck2fan wrote:
Feb 3rd, 2013 12:07 pm
It is actually a matter of perception.... I would frame any discussion with the company in the light that it is THEIR FAILURE to be able to continue to cover him because they don't have the authority to operate in B.C. If he is willing to continue coverage with TD after he moves why should he be punished because they can't offer insurance legally there? I would argue to the Ombudsman that they are the ones denying him coverage because of his new location... The pinheads who work at insurance companies use word games, all the time to get out of paying claims why not try using one back on them to get out of paying a bogus penalty?

Cosmic 5 "no, buddy would be the one cancelling it because he doesn't need any coverage in ontario after May 1/13 so he would have to cancel the policy 2 months after the renewal date."

So TD which is an international banking/insurance company wouldn't be able to transfer his policy to another province where they do have the authority to insure autos without a penalty? If they have that ability, then to punish a policy holder (which they told the op they were going to do) because they couldn't in B.C. seems unfair doesn't it not? BTW if their rep was wrong and the OP won't be charged a "penalty" then they should up their training for reps LOL.

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