Still, it turned out to be a saga of a phone call to get it up and running on their system and in the end the best they could offer me was only third party cover. But we had to take it. I explained the trip was only for three weeks and then we would probably sell it, but my mate loved the bike and now wants to ship it to California, so there’s a genuine reason to cancel the insurance. The total for the year was £330 and I initially gave £51 over the phone to get it started and an extra £51 or so for my friend as an added rider for three weeks. At no time have I signed any finance agreement, the paperwork being received after I returned from the trip.

I rang to formally cancel the insurance after the trip, but the insurers asked for £150 in ‘outstanding fees and cancellation’! I explained that this would not be the case, but have since received several letters, (now asking for £201) and the insurers are demanding payment and threatening debt-collectors, extra fees and legal-action. I don’t mind a £20 or so cancellation fee for 5 minutes of the insurer’s time to cancel it on a computer, but this is an absolute rip-off by anyone’s standards. Where do I stand here?

Tony, Norwich.

This isn’t really a legal query – it’s just that insurers have organised themselves so that everything goes into the bottom line premium and then they rack up the lost profit elsewhere. They will have a cancellation tariff, which can be a total rip off, but once you have taken the policy, unless you cancel within seven days you are stuck with the terms. This is why I treat insurers like rattlesnakes – keep them a long way away from you and never trust them! This is why we have no links with any insurers. You have to climb into the sewer with them. Legally, however, I think they are probably right.

The tariffs are designed to stop you cancelling the insurance. Most people do not read the cancellation tariffs but early cancellations can result in 50 or 60 per cent of the premium becoming immediately payable, and don’t get me started on the APR rates for paying in instalments – the rates make pay day loans look like good value! The insurers have you over a barrel. You must have insurance by law, and most people don’t read the small print – and the small print can be where the stitch-ups occur. Also, as a general rule of thumb, if your insurance is really cheap, the more likely you are to have these kinds of nasty surprises. If you think about it, your risk is pretty similar, based on similar statistics and underwriting. Insurers have to make their money somewhere and cheap insurance is often nasty insurance. If the premium is cheap, then the small print is usually nasty.

Sorry I couldn’t be of any more help – but you do have one avenue open to you which is to start with a formal complaint then escalate it up to a Financial Services Ombudsman complaint – they have a concept of “fairness in dealing with consumers” which insurance law and insurers seem to be devoid of. If it’s any consolation, most of the bike insurers pull exactly the same scam.

Andrew Dalton

Fast Bikes December 2013