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Car insurance 50% cancellation penalty clause on top of loads of other clauses
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[Deleted User]
Posts: 0 Newbie
Had to cancel my insurance policy after 3 months got next to nothing of the £800 premium back. When I rang them up they went through loads of charges and things. Most of which are £30 admin fees which are a bit steep and replicated due to using a broker on top of the insurance company. But one of which stands out as particulary unfair. When led through the charges I was pointed to page 25 of the small print policy booklet.
If you cancel after 3 months a 50% premium penalty will be levied on top of the whole load of other fees. This a whopping figure.
My question is as this appears to be a disproportionate contractual penalty charge, similar to what the banks have been doing and people have been claiming back. Should I be taking this company to a small claims court?
If you cancel after 3 months a 50% premium penalty will be levied on top of the whole load of other fees. This a whopping figure.
My question is as this appears to be a disproportionate contractual penalty charge, similar to what the banks have been doing and people have been claiming back. Should I be taking this company to a small claims court?
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Comments
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bumpety
bump0 -
It is possible that the broker has this agreement with the provider, maybe putting these clauses in place gave greater security to the underlying insurer so allows for a lower headline quote.
a classic car policy i had a couple of years ago was completely non refundable - if you cancelled the policy in the first year you received nothing.0 -
Hmm well ive sent them a letter asking to reclaim illegal charges anyway.
My thinking is its fairly similar to bank charges, you dont get told about them or the circumstances that lead to them up fron also they are a penalty disproportionate to the actual cost to the company. I didnt sign any form agreeing to these charges.
Insurance is a risk based industry and given that you have cancelled the poilcy there is no more risk of you claiming therefore it is of no further cost to the insurance company. All contractual penalty charges must be proportional to cost. The fact that many insurance companys dont charge this get out fee means there is no cost.
Might as well take them to small claims if they dont respond after all i dont have anything other then a small fee to lose.0 -
50% cancellation charge is outrageous! Which insurance company was it by the way??Happiness is buying an item and then not checking its price after a month to discover it was reduced further.0
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Ensign through a broker
50% isnt the whole thing its just the biggest charge I actually only got back 30% of the total price for 64 days of car insurance. Now thats outrageous
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I hate to be pedantic but...
unlawful (potentially) not illegal.Hmm well ive sent them a letter asking to reclaim illegal charges anyway.
alsoMy thinking is its fairly similar to bank charges, you dont get told about them or the circumstances that lead to them up fron also they are a penalty disproportionate to the actual cost to the company. [\quote]
how do you know it is disproportionate? getting out of a contract with a counterparty does cost money regardless at what level this happens. there is only a tiny margin in arranging car insurance, so obviously anything on top of this is going to cost.I didnt sign any form agreeing to these charges.[\quote]
you agreed to the insurance and paid, and were given a cooling off period to cancel if you did not like the provisos of the policy.
all companies will charge these fees, they will just integrate them into the quote in different ways - many will just be written into the policy. however to compete as the lowest quote a firm needs to strip out all these costs - i am sure that you will find it is the cheapest quoters who charge the most fees.Insurance is a risk based industry and given that you have cancelled the poilcy there is no more risk of you claiming therefore it is of no further cost to the insurance company. All contractual penalty charges must be proportional to cost. The fact that many insurance companys dont charge this get out fee means there is no cost.
Might as well take them to small claims if they dont respond after all i dont have anything other then a small fee to lose.
if all policies were loaded with these fees then you wouldnt have any grounds for complaint even though you had paid them in the first place. isnt transparency better?
is the cost a penalty charge or just the costs needed to get out of the agreements? the structure of insurance products is not as straightforward as you may think?0 -
Hello,
I am in a similar situation: I am selling my car and rang my insurance provider this morning to find out how to cancel my policy. I was told I would be charge a £30 cancellation fee as well as a direct debit fee (which will depend on the amount I get charged every month).
Is this common practice?0 -
If you cancel after 3 months a 50% premium penalty will be levied on top of the whole load of other fees. This a whopping figure.
My question is as this appears to be a disproportionate contractual penalty charge, similar to what the banks have been doing and people have been claiming back. Should I be taking this company to a small claims court?
Found it- http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm
The insurance company cannot charge 50% of your premium if you cancel they have to charge a fair amount. There was a case about 2-3 years ago that went to the financial ombudsman and the insurance company lost due to excessive charges.
It is online somewhere in the financial ombudsman's monthly bulletins where it was a case history. (http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm)
I would suggest:
1. refer to http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm
2. Write a letter of complaint as per your insurance contract stating this and ask for some money back.
3. If you get no joy escalate to the ombudsmanI'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
Hello,
I am in a similar situation: I am selling my car and rang my insurance provider this morning to find out how to cancel my policy. I was told I would be charge a £30 cancellation fee as well as a direct debit fee (which will depend on the amount I get charged every month).
Is this common practice?
From what I searched previously yours IS considered a fair contractural charge.I'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
Ok, thank you!0
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