Automotive

Insurance termination fee

  • Last Updated:
  • Oct 28th, 2020 1:04 am
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton

Insurance termination fee

I was insured with PemBridge last year, expire date on Oct 2nd, 2020. I notified them on Sep 2nd, I will not continue my insurance with them. But they charged me on Sep 8th on Auto and Sep 18th on Home for 2-month premium. Then in early Oct, I got one month refund. Today I got another mail say I owe them one month termination fee. It's really frustrating.
Someone can help me here? How to avoid this kind of termination fee in the feature? I signed one year contract, not multi-year, why insurance company can charge you anyway! Also how can they charge so early, coverage does not start yet. It's like the company pay their employee one month ahead! Does it ever happen? This is beyond greed!

In case anyone might wonder how much I pay insurance, I moved here in 2013, when I bought my car in Jan 2014, the first year insurance is $4900, since then I don't have any traffic violation, last year, my 2014 Honda Accord premium is $2900, and this year Pembridge raise my premium to $3300. I switch to sgI through agent, now it's 2700$. In the past 7 years, the total amount I paid for auto insurance is adding up more than my car, it's also more than my food spending. I have to save money for insurance than food. How pathetic I am.
17 replies
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
I'm from Shanghai, a much-crowded city, you get a high chance to have an accident. But back in Shanghai, I pay 3000Yuan which is 600$ a year.

After I moved to Toronto, I went to America for a year in North Carolina for a project assignment. Geico charges me 720$ for that year 2015, same car, same driver.

Just don't understand how the Canadian Insurance industry can operate like this!

Except for Insurance, I love everything else here compare with America.
Deal Fanatic
Jul 13, 2009
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Holy cow. I would call in and speak with a manager/supervisor, but that doesn't sound right if you already gave notice to cancel. I cancelled mine earlier this year to switch to a new company and no fees like that. I even just gave one week notice.

If not, raise it up with the regulator , I think it's Insurance Institute of Canada or an ombudsman.

Also, I would never drive in Shanghai....that place is crazy, but my favourite memory of Shanghai is having my American coworker tell me it's okay to run across 8 lanes of traffic to get to the other side.
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Jun 12, 2008
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Ancaster
Hopefully one of the insurance broker RFD members will comment on this but I don't know why you got charged a termination fee when you gave them notice.

I've switched insurance companies many times over better rates/coverage and I am required to give them notice that I am terminating coverage (which I do) and I've never been charged any additional fee.
Deal Addict
Jan 5, 2004
3930 posts
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Toronto
Call in and discuss it with the insurance agent or your broker.

To avoid this in the future, do everything through writing, and get the confirmation in writing.
Deal Addict
Jan 5, 2004
3930 posts
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Toronto
zhuyyu wrote: I'm from Shanghai, a much-crowded city, you get a high chance to have an accident. But back in Shanghai, I pay 3000Yuan which is 600$ a year.

After I moved to Toronto, I went to America for a year in North Carolina for a project assignment. Geico charges me 720$ for that year 2015, same car, same driver.

Just don't understand how the Canadian Insurance industry can operate like this!

Except for Insurance, I love everything else here compare with America.
You're comparing apples to oranges. China and the US have very low minimum of coverages that are required by law. Once you start comparing the exact same coverages, in an area with similar accident rate/repair costs, the "difference" you see in the final price is no longer that huge.

Finding a bodyshop in Shanghai, they don't charge you that much on labour. Someone sues you for lost income from accident? Well, wages are fairly low in Shanghai. Cost of replacement vehicle are low, while you might drive a BMW, majority of the vehicles sold are lower price tag cars, so you aren't replacing $40-50k SUVs, but only have to pay someone to replace their Geely, BYD or Chinese Buick. If anything, owning a car is Shanghai, just licensing fees along outweighs the cost of insurance + registration here. And you can apply the same logic in North Carolina.

It's easy for us to compare the final price because few and far in-between insurance agent/broker would walk us through our insurance policy. And even if they did, I doubt most of us would pay attention to it.
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
Ok, then let's not look at the price. Can you explain why I need pay insurance fee on Sep 8th for the coverage date start on Oct 2nd. What is the logic for that?

Did you walk in McDonalds ask for a meal, and have to pay back in Sep, so you can get the meal in Oct?
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
Same thing happen to my cable, they invoiced on Sep 7th and charged me on Sep 15th to cover my usage between Oct 1st to Oct 31st.
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Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
It's different, In Canada, if you are not at fault, you are free to go. Someone do J-walking, you hit him, you are fine. In Shanghai, no matter how the accident happens, the driver and driver's insurance will have to pay, how much depends on how bad the accident is. So even someone Jwalking, you don't run over them. CCP call it "Harmoney" system. Very Bad Bad practice. Yes, you can walk through 8 lane traffic, no one will hit you, it's a lot money.
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Oct 5, 2008
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thephenom wrote: You're comparing apples to oranges. China and the US have very low minimum of coverages that are required by law. Once you start comparing the exact same coverages, in an area with similar accident rate/repair costs, the "difference" you see in the final price is no longer that huge.

It's easy for us to compare the final price because few and far in-between insurance agent/broker would walk us through our insurance policy. And even if they did, I doubt most of us would pay attention to it.
this
Deal Guru
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Jul 12, 2003
12400 posts
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Toronto
zhuyyu wrote:
In case anyone might wonder how much I pay insurance, I moved here in 2013, when I bought my car in Jan 2014, the first year insurance is $4900, since then I don't have any traffic violation, last year, my 2014 Honda Accord premium is $2900, and this year Pembridge raise my premium to $3300. I switch to sgI through agent, now it's 2700$. In the past 7 years, the total amount I paid for auto insurance is adding up more than my car, it's also more than my food spending. I have to save money for insurance than food. How pathetic I am.
OP, You are a brand new driver in North America back in 2013, it is very understandable that you will pay higher insurance premium than others.

You have to understand what insurance cover. It doesn't only cover the value of your car, it cover liability as well. Standard liability insurance is 1 million coverage, some is 2M. If you are in at fault accident and crash in someone's property, the property owner can sue you for the damage, a tiny townhouse in GTA worth 1M dollar, and approx 600-700k to rebuild. So you are not only paying for the risk that your car is stolen or total lost in an accident. Even more complicated it involve body injury.

You cannot compare your original country to the one that you are living in. It is not the same, I don't understand why you compare the insurance in Shanghai and Toronto. Like others mentioned, the wages is different, a car put into a body shop for a technician to repair, the labor cost can be very different, the parts can be different, maybe in China, they allow to put in lower counterfit parts to put the car back on the road and it is not the same in Canada.

Yes, Canada's car insurance is expensive but they are many beautiful stuff in Canada too, I'm sure there are reasons why you moved from China to Canada. No place is perfect.


Back to your original question, termination fee should be charge only if you are cancellation your policy during the year, not for not renewing. Call in and ask for an explanation on those fee, it could be a over look or an human mistake.
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Dec 18, 2007
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zhuyyu wrote: I was insured with PemBridge last year, expire date on Oct 2nd, 2020. I notified them on Sep 2nd, I will not continue my insurance with them. But they charged me on Sep 8th on Auto and Sep 18th on Home for 2-month premium. Then in early Oct, I got one month refund. Today I got another mail say I owe them one month termination fee. It's really frustrating.
Someone can help me here? How to avoid this kind of termination fee in the feature? I signed one year contract, not multi-year, why insurance company can charge you anyway! Also how can they charge so early, coverage does not start yet. It's like the company pay their employee one month ahead! Does it ever happen? This is beyond greed!

In case anyone might wonder how much I pay insurance, I moved here in 2013, when I bought my car in Jan 2014, the first year insurance is $4900, since then I don't have any traffic violation, last year, my 2014 Honda Accord premium is $2900, and this year Pembridge raise my premium to $3300. I switch to sgI through agent, now it's 2700$. In the past 7 years, the total amount I paid for auto insurance is adding up more than my car, it's also more than my food spending. I have to save money for insurance than food. How pathetic I am.
I used to work in auto insurance and think I understand, but correct me if I'm wrong.

I think you used the wrong wording when cancelling.
Seems like you meant to say you were wanting to cancel as of Oct 2 when your term was up, but they took it as you wanted to cancel then and the "termination" is a short rate cancellation and not pro-rata.
Why they charged you an additional 6 days insurance is beyond me though.

The actual terminology is non-renew or lapsing the policy, but you should be speaking with your broker about this.
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
IceBlueShoes wrote: I used to work in auto insurance and think I understand, but correct me if I'm wrong.

I think you used the wrong wording when cancelling.
Seems like you meant to say you were wanting to cancel as of Oct 2 when your term was up, but they took it as you wanted to cancel then and the "termination" is a short rate cancellation and not pro-rata.
Why they charged you an additional 6 days insurance is beyond me though.

The actual terminology is non-renew or lapsing the policy, but you should be speaking with your broker about this.
Thank you, I will try it tomorrow.
Member
Dec 5, 2013
374 posts
136 upvotes
Hamilton
MP3_SKY wrote: OP, You are a brand new driver in North America back in 2013, it is very understandable that you will pay higher insurance premium than others.

You have to understand what insurance cover. It doesn't only cover the value of your car, it cover liability as well. Standard liability insurance is 1 million coverage, some is 2M. If you are in at fault accident and crash in someone's property, the property owner can sue you for the damage, a tiny townhouse in GTA worth 1M dollar, and approx 600-700k to rebuild. So you are not only paying for the risk that your car is stolen or total lost in an accident. Even more complicated it involve body injury.

You cannot compare your original country to the one that you are living in. It is not the same, I don't understand why you compare the insurance in Shanghai and Toronto. Like others mentioned, the wages is different, a car put into a body shop for a technician to repair, the labor cost can be very different, the parts can be different, maybe in China, they allow to put in lower counterfit parts to put the car back on the road and it is not the same in Canada.

Yes, Canada's car insurance is expensive but they are many beautiful stuff in Canada too, I'm sure there are reasons why you moved from China to Canada. No place is perfect.


Back to your original question, termination fee should be charge only if you are cancellation your policy during the year, not for not renewing. Call in and ask for an explanation on those fee, it could be a over look or an human mistake.
Yes in deed, in my origin post I said, I love everything else except insurance in Canada. I think it's unfair. Let's say we are same age, some gender. I guess you only pay 1/3 of my insurance. Is there 3X chance I kill someone on the road than you? Is there any evidence for that, new immigrants kill 3X people than local grow-ups or just pure greed, they want more GM% from us because they have a perfect excuse.
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Dec 21, 2013
2161 posts
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GTA
zhuyyu wrote: I'm from Shanghai, a much-crowded city, you get a high chance to have an accident. But back in Shanghai, I pay 3000Yuan which is 600$ a year.

After I moved to Toronto, I went to America for a year in North Carolina for a project assignment. Geico charges me 720$ for that year 2015, same car, same driver.

Just don't understand how the Canadian Insurance industry can operate like this!

Except for Insurance, I love everything else here compare with America.
Insurance and Telecom are the biggest vultures in Ontario. The lobbyists are too strong.

Example:
https://www.iphoneincanada.ca/carriers/ ... ss-report/
Sr. Member
Oct 30, 2017
821 posts
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Toronto
zhuyyu wrote: Yes in deed, in my origin post I said, I love everything else except insurance in Canada. I think it's unfair. Let's say we are same age, some gender. I guess you only pay 1/3 of my insurance. Is there 3X chance I kill someone on the road than you? Is there any evidence for that, new immigrants kill 3X people than local grow-ups or just pure greed, they want more GM% from us because they have a perfect excuse.
Everything is more expensive in Canada if compared to the U.S. The wages are lower also. Unfortunately moving to the states isn't an option for everyone.
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Jul 12, 2003
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zhuyyu wrote: I think it's unfair. Let's say we are same age, some gender. I guess you only pay 1/3 of my insurance. Is there 3X chance I kill someone on the road than you? Is there any evidence for that, new immigrants kill 3X people than local grow-ups or just pure greed, they want more GM% from us because they have a perfect excuse.
Insurance is a business. They need to evaluate risk to see if the business is profitable.
In your case, there is no stats that back you up that you are a good driver, I don't believe the driving experience in China count in Canada, so you are treat as a new driver.
New drivers are more likely to have accidents than others who have better drive experience (in general). Accidents mean claims, that means money pay out. They need to collect enough insurance premium to pay claims.
If they insure riskier drivers at lower insurance rate, then eventually they will lose money and it is not a good business.

if it is not a good business, who will runs it?

Most of us gone thru this stage, either you are new immigrant or you were raised here and paying stupid high premium because you just got your G2 license at 18yrs old.

As you were comparing, I moved from Montreal to GTA 12 yrs ago, I was paying $62 per month in Montreal area and once I moved to GTA, I was paying $190 per month, it was the same driver, same car! just different location...

It seems like you enjoy living in Canada, good stuff has price to pay. just suck it for few years and keep your record clean. :)
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