A Lot More Than She Bargained For?

crouchend62

My partner recently decided not to renew our home insurance policy with More Than because she'd found considerably cheaper cover elsewhere with another company

She'd earlier received the renewal paperwork from More Than offering her similar monthly repayment terms for the next year of cover, similar to what she'd paid for 2007/8's cover. Upon finding out she could make big savings with a different company, she decided to change companies and cancelled the More Than direct debit before the commencement of the further year's cover and assumed that would be the end of the matter as she'd made no formal agreement with More Than for a further 12 months cover via monthly repayment.

She then received several reminder letters from More Than informing her that she needed to reinstate the direct debit. Both of us have previously cancelled monthly instalment repayments of yearly insurance policies even mid-term previously (when having sold a car previously covered under a car insurance policy, or moving house and no longer needing the previous contents cover) and were simply being asked to return the policy document by the company concerned, so subsequently not wishing to proceed with the More Than before the new year's cover had begun and never having agreed to another year of cover in the first place didn't appear to be an issue to be majorly concerned over.

Yesterday, my partner received a Section 87(1) Default Notice under the CCA 1974 from More Than with the term and nature of the breach as follows:

"Term Breached:-the term of the Loan Agreement requiring you to make payments.

Nature of the Breach:-"We have recently requested the return of a completed Direct Debit Instruction, which we regret we are unable to trace

If the breach isn't remedied (i.e. paying for the year's cover in full or reinstating the direct debit) the company threatens the following action:

"We will serve a notice in writing terminating your Loan Agreement and your contract of insurance.

If you wish to continue your contract of insurance it is important that you take the action to remedy this situation as outlined overleaf. Additionally, we may also notify credit reference agencies of your default in the payment of instalments under the Loan Agreement."

I had no idea insurance companies enforced the CCA against those deciding not to proceed with a year of cover with a monthly method of repayment. Registering the default with Experian etc. is clearly a major concern now as it could clearly adversely affect for her what is currently a good credit rating. My partner has now paid for a year's contents cover with another company and certainly has no intention whatsoever in paying More Than the year of cover cost she never agreed to extend in the first place.

This isn't a case of borrowing a sum of money, signing a credit agreement and then defaulting on the loan. It is about making an early choice not to avail yourself of insurance cover you no longer need or want because you have found more competitive cover elsewhere. Yet this company is now threatening to default my partner in similar manner to how a loan company would do for a customer missing payments. It doesn't seem right to me and is certainly not a path taken by all major insurance companies (The Co-Op, for example). Where does she stand over this, please? Is this company entitled to do this bearing in mind they received no verbal or written request from my partner to continue her direct debit and the cover for 2008/9? I am now concerned More Than will use the argument that the cover renews year on year unless you specifically inform them you wish to cancel it before the new year of cover begins? Regardless of legal rights, I find their tactics of sending out default notices a low trick and I would certainly never use More Than for insurance in the future.

wornoutmumoftwo

I know these companies auto renew as I'm actually just moving to morethan.
Rang my current insurer and moaned as the premiums were to be double last year and he said I had 14 days to cancel the autorenew.

Haven't got any specific advice for you though, sorry.

crouchend62

Yes, I suspect the words auto and renew will have a lot to do with this. Unfortunately, she didn't contact the company prior to renewal date to say she didn't want to proceed with the new year of cover because she'd been of the view the choice was her's whether to take it or not and not the company's. I would see More Than's stance being more justifiable if she'd ticked a box or signed something prior to the commencement date of the 2008/9s insurance to indicate she wanted it, or if she'd stopped paying the year's premium mid-term, say, but not as things currently stand.

I feel the whole auto renewal process is very much sharp practice wholly loaded in the favour of those companies deciding to employ it. Of course, they'll defend it as offering extra convenience and peace of mind for their customers! I'll beg to differ with that. I see it to be more of a service for the benefit of insurance companies to up their renewal statistics.

wornoutmumoftwo

I agree with you, we auto renewed car insurance for years before we discovered this site, as new cusotmers the quote was about £200 cheaper. Needless to say we plan on never auto renewing again.

I have made a note of expiry dates so I can watch for the paperwork coming through the door now.

When did the auto renew begin? My insurance has a one month penalty for cancellation (which I won't have to pay as I'm within the 14 days)

crouchend62

I am not sure when the auto renewal began at this stage as the policy is in her name and we haven't delved through the small print of it as yet.

I've used the Co-Op for my insurances for years on and off and have never had a problem like this. They may cost a bit more, but I've yet to be treated badly by them, either when having to make a claim or when deciding to terminate a policy mid-term or not extend one for a further year's cover. The choice has been given to me in whether I take out a further year or not and been given to them using the 'implied consent given by silence' rule. More Than's tactics have been a real eye-opener for me and I guess they are not alone in employing them.

cogito

Have you tried talking to them or did you just ignore the correspondence?

Steve1981

crouchend62 wrote: »

I feel the whole auto renewal process is very much sharp practice wholly loaded in the favour of those companies deciding to employ it. Of course, they'll defend it as offering extra convenience and peace of mind for their customers! I'll beg to differ with that. I see it to be more of a service for the benefit of insurance companies to up their renewal statistics.

its actually part of a government initiative to cut down on uninsured drivers.

In a situation such as this, when More Than are contacted and its explained that ph has cover elsewher, most companies are reasonable enough to cancel teh policy back to the renewal date. worst case scenario should be the cancellation fee is charged. i doubt that they would try and enforce ph pays for the time on cover aswell as long as they can prove cover was held elsewhere

dunstonh

Home insurance has often been auto-renewed with monthly payments for over 20 years. Its not something new. Credit agreements tend to apply to those that paid monthly. Not those that paid annually.

Cancelling the direct debit does not cancel the contract. You have to inform the insurer that you will not be renewing. It will clearly state what you have to do on an auto-renewal policy in the letter they send to you.

I've used the Co-Op for my insurances for years on and off and have never had a problem like this.

CIS have been on auto-renewal for years. IIRC, they dont use a credit agreement though. That said, that doesnt remove your liability to pay if you dont inform them that you dont want to renew.

With respect, your issue is that you didnt read the letter sent to you and the consequences of those actions are that you are now in this current position. Blaming More Than for you own error isnt going to achieve anything. Steve, posted above, has the right idea on what you should be doing now.

crouchend62

Yes, I take the points made that my partner should have communicated with More Than to tell them she didn't want to renew her contents policy. This wasn't done on the grounds (however misguided) I've previously described.

I also now take the point over the Co-Op being on auto-renewal and having been for years as the person making it gives the impression of knowing what they are talking about. That said, in the past I have cancelled monthly instalment policies with them mid-term and been charged nothing for doing so and as has been said, have not been bound to a credit agreement for taking that payment option.

I still believe that there are certain insurance companies that do things in a more decent and human way than others do. Auto renewing is something that works well for insurance companies and that's the main reason why they use it. This was not a car insurance policy, it was a home contents one, so preventing uninsured drivers was nothing to do with it being auto-renewed, or was it done to prevent uninsured burglaries from taking place?

Dress the option up whatever way you like, auto renewal greatly assists insurance companies improve their renewals figures that's the bottom line of it. Handing out default notices to customers not wanting take up a further year's option of insurance (however much resonsibility is now the customer's to specifically say they don't want the cover, rather than say they do) is not the way to encourage them back again at a later time.

I decided some time ago to only pay my insurance policies upfront as I don't want to be credit searched, tied to loan agreements, or ultimately receive threatening letters through the post similar to the ones my partner has received. Still, if they do register the default as they say they may, she'll probably have to pay her future insurance polices in full also, whether she wants to or not.

Thanks all for your comments and it's a hard lesson learnt.

dunstonh

Auto renewing is something that works well for insurance companies and that's the main reason why they use it.

It works well for the insurance companies and it works well for the majority of consumers. The stats are something like 2/3 to 3/4 of people renew with the same insurer.

As you say its a lesson learnt. Read your post at renewal time.

vikingaero

If we didn't have auto-renewal we'd have a lot more posts like:

Had an accident and found out I'm not insured - insurer did not auto-renew.

House caught fire and I thought we were covered.