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Car Insurance "Deposit"

nelifex Avatar
2y, 10m agoPosted 2 years, 10 months ago
So I went with a company for my car insurance last January and I paid £110 as a "deposit". Thinking about that payment just now while going through the renewal quote, I rang them to ask what happens to it - does it come back to me after my policy lapses, after the first year etc. The girl on the phone tells me I "might" see some of it come back, if I were to cancel the policy. I told her I wasn't going to cancel, so she then tells me it takes care of of the setting-up fees. I asked her why it is then called a "deposit" if I was never going to see it again and she said she didn't know; she "didn't make the policies". Having gone through my documentation there's very little that explains it.

Can anyone with experience explain whether I can expect to see this money again or whether it's yet another word that means one thing to the public but re-jigged terminology to mean something else.
nelifex Avatar
2y, 10m agoPosted 2 years, 10 months ago
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Best Answer
UnicornRiver
Also a deposit never means refundable??

Sure it does. If pay a security deposit to my landlord before I rent a property, that amount is refunded if the property is returned to him in good condition. First definition I pull up is "to place for safekeeping or in trust".

But what you said before clears it up for me.

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Responses/page:
#1
Your deposit is normally knocked off the full premium have you checked this. We just renewed and the deposit covers 2 months so only paying for 10 months
#2
enma512
Your deposit is normally knocked off the full premium have you checked this. We just renewed and the deposit covers 2 months so only paying for 10 months

The deposit works out at 2.8 times my monthly cost, but I paid over 10 months. The original quote was the amount spread over 10 months anyway, it didn't make up part of the total amount.
#3
I have never known this. When we used to pay our insurance premiums by direct debit we always paid an amount up front then paid the remaining about over 10months. Remember you are charged interest for spreading cost as well. I found that usually equated to nearly one months premium which bumps up your original quote.
banned#4
You always pay a deposit which is part of the payments for the insurance, if you add your payments and deposit to what the total was (including any interest) then it should add up the same.
#5
Who are you insured with? Direct with an insurance company or through a broker?
#6
Butterbean
Who are you insured with? Direct with an insurance company or through a broker?

Direct through the insurance company.

The deposit just seems way off of the mark, especially since this years' renewal is a total of £314.31 with a deposit of £26.19 followed by 11 payments of £26.19. There's no mystery there; £314.31 by 12 is £26.19. Simples.

It's just that last year my total was £383.88. Paid the deposit of £110 and then paid 10 x £38.38. The £110.31 just seems plucked out of thin air.

I just can't get my head around this oO The company are refusing to give me a straight answer; I just want them to tell me a) what the deposit has paid for, b) how the deposit was worked out or c) whether it's returnable, which is the dictionary definition of "deposit".

Edited By: nelifex on Jan 09, 2014 14:48
#7
Each year the insurer should send you a schedule which sets out the cost of the premium, any credit charges, and the monthly payments to give the total amount payable.
That should make it clear if the deposit comes off the total premium or is something else entirely.
If you cannot find the original the insurer should be able to supply a copy.
#8
There is no deposit on a renewal It's just 12 straight payments.

When you set the policy up there is usually a deposit of around 20% of the premium. If premium is £100 then its £20, this leaves £80 to be financed at usually around a 10% interest rate so £88 to be spread across the year, usually 10 payments of £8.80 each.

You will not see a penny of the deposit back, it's more a deposit to the Insurer that they get money from you even if you cancel!
#9
Also a deposit never means refundable??

Dictionary definition is as follows:

deposit
dɪˈpɒzɪt/
noun
noun: deposit; plural noun: deposits

a sum payable as a first instalment on the purchase of something or as a pledge for a contract, the balance being payable later.
#10
UnicornRiver
Also a deposit never means refundable??

Sure it does. If pay a security deposit to my landlord before I rent a property, that amount is refunded if the property is returned to him in good condition. First definition I pull up is "to place for safekeeping or in trust".

But what you said before clears it up for me.

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