Ladybird Insurance - Cancellation Charge before Policy start date
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pvt
Posts: 1,433 Forumite
Dear daughter found this insurer (which answers the phone as Fresh Insurance) through a comparison site offering a competitive quote. Called up, went through the usual hard sell for extras (all of which she resisted), and then paid the premium quoted.
On receipt of the Policy documents we feel some of the Ts&Cs are unsuitable/unacceptable, and also based on negative feedback on the web. So she called back today to cancel the policy BEFORE it takes effect.
She has been told they will charge a £60 booking fee for cancelling the policy as "the work has been done to set it up".
The information on their website clearly states that if a policy is cancelled within 14 days, and prior to the insurance commencing, the entire "premium" is refunded.
There seem to be some weasel words being used around the term "booking fee" as opposed to "premium", however there is nothing anywhere to suggest the premium is £XX and a booking fee of £YY, just a single total amount.
We plan to make a formal complaint to them in writing, but before doing so wondered of anyone has any insight - can an insurer make such a charge prior to the policy coming into force?
On receipt of the Policy documents we feel some of the Ts&Cs are unsuitable/unacceptable, and also based on negative feedback on the web. So she called back today to cancel the policy BEFORE it takes effect.
She has been told they will charge a £60 booking fee for cancelling the policy as "the work has been done to set it up".
The information on their website clearly states that if a policy is cancelled within 14 days, and prior to the insurance commencing, the entire "premium" is refunded.
There seem to be some weasel words being used around the term "booking fee" as opposed to "premium", however there is nothing anywhere to suggest the premium is £XX and a booking fee of £YY, just a single total amount.
We plan to make a formal complaint to them in writing, but before doing so wondered of anyone has any insight - can an insurer make such a charge prior to the policy coming into force?
Optimists see a glass half full 
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be
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Comments
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Cancelling prior to the policy starting doesn't mean you don't pay cancellation fees.
This should all be set out in the policy docs, and if there is no mention of any fees to pay on cancelling you have grounds to complain.
Their complaints procedure will be set out in the policy docs0 -
Fresh are a Broker. They have provided a service to you for which they are getting paid a commission by the insurer. By cancelling, they are losing that commission, despite them providing you a service. They've got the acquisition fee to pay the comparison site (these are normally about £50!!).
This is why they charge a cancellation fee.
The insurer will return the full premium to the Broker, who will deduct a fee and refund you the balance.
Yes they can make this charge.0 -
Thanks Quentin, The policy docs had not been received prior to the policy being paid for.
Paddy, the call was made to "Ladybird Insurance", she claims there was no mention made of them being a broker and there being a fee.Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be0 -
Cancellation charges are allowed within the cancellation rights period. The fact the insurance commencement date has not occurred yet does not matter. There is no issue with cancellation fees as long as they match their quoted terms.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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I've searched through all the documents that they sent (after the payment was made) and also trawled their website. I can find no reference to a broker fee.
However both the policy wording:
If at the date of cancellation your policy has
not yet commenced you will receive a full
refund from us
and the keyfacts:
where cover has not commenced prior to the end of this 14 day period, you will be entitled to a full refund of the premium you have paid
So I guess this will come down to what was said on the phone call.Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be0 -
You have missed this on their website regarding their charges if you cancel before the policy starts:I've searched through all the documents that they sent (after the payment was made) and also trawled their website. I can find no reference to a broker fee.....
.Within the first 14 days or before the policy starts:
You have the right to cancel within 14 days of when you purchase your new policy, or from when you receive your policy documents, whichever is later, and within 14 days of renewal date for renewed policies. The insurers will pay a pro-rata refund of premium, subject to a minimum charge, and we will refund any policy set-up charges. We will deduct a cancellation fee of £60 from the total refund to cover our costs.0 -
Thanks Quentin - I'm curious where you found that, I couldn't.
The sequence of events is:
- search engine returned a list of policy prices;
- chose the one from Ladybird and clicked "buy online";
- came to a page that said you must ring in person to set up a new policy;
I don't believe the wording you've quoted was on any of those pages, nor was the charge mentioned by the agent she spoke to.Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be0 -
Paddy, the call was made to "Ladybird Insurance", she claims there was no mention made of them being a broker and there being a fee.
Why would you think a Broker is obliged to tell you that they are a Broker?
I'm sure they will have said something along the lines of "you agree to proceed on limited information and full documents will be sent".
If you are saying they didn't tell you about this, you need to complain to them, they will tell you what was/wasn't said and can steer you very quickly to where they advised you of this.
If you are unhappy with their response to your complaint you have the right to then escalate it to the FOS (Financial Ombudsman Service) within 6 months of the receipt of your response. But the FOS won't listen to your complaint before you have exhausted the Broker's complaint procedure.
Is your complaint that there is a fee, or that you say you weren't aware of it?0 -
http://www.ladybirdinsurance.co.uk/terms-and-conditions/Thanks Quentin - I'm curious where you found that, I couldn't.......0 -
To justify charging a Broker's fee perhaps?paddyandstumpy wrote: »Why would you think a Broker is obliged to tell you that they are a Broker?paddyandstumpy wrote: »I'm sure they will have said something along the lines of "you agree to proceed on limited information and full documents will be sent".
So you feel a cancellation fee you were not aware of at that point would still be reasonable?paddyandstumpy wrote: »If you are saying they didn't tell you about this, you need to complain to them, they will tell you what was/wasn't said and can steer you very quickly to where they advised you of this.
Agreed, and I guess a recording of the call will reveal this.paddyandstumpy wrote: »Is your complaint that there is a fee, or that you say you weren't aware of it?
The latter. And the fact that the keyfacts and policy documents make no mention either.Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be0
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