GAP Insurance

Jamesf81

Hi

I had GAP Insurance with my car finance agreement and cancelled it a couple of months into the agreement.

The Insurance company told me that no refund or rebate would be given as i did not cancel within the 14 day cooling off period.

What makes me mad is that the premium of £399 was paid upfront(which i now beleive the FSA have outlawed?) then Blackhorse paid the dealer for the car and the policy and are now charging me £17.76 a month for a policy i now longer have.

Where is the fairness and consumer protection in that? While the insurance company are sat laughing with £399 for a policy they dont have to pay out on.

Any help will be appreciated.

Treacle1983

Hi, I work in insurance and in training people about the fsa/legal side of things.

Yes you only have a 14 day cooling off period (during which you can cancel for free) and they may charge a reasonable cancellation fee after that - most places is a months worth (fsa dosen't specify what 'reasonable' is.

But you will still be entitled to a refund pro-rata on the rest of it.

eg: home insurance £120, only insured for 1 month and cancel - you would have to pay a fee eg: £10 and would have been on risk/covered for a month so only get back £100 altogether.

Hope that helps.

Jamesf81

Thanks for the reply.

Thats what i thought i would be entitled to some kind of rebate but they are saying after the 14 days no refund will be given.

I dont mind paying cancellation charges etc but i think it is harsh and wrong to say to someone they cannot have anything back and keep the £399 for doing nothing.

Is this not the kind of thing the FSA are clamping down on?

Thanks

marshallka

Don't know if this is any help here as its regards PPI but have a read

http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/043.shtml

Jamesf81

Thank you its a great help if it does apply. I know they are differrent in a way but GAP is still an insurance product sold by companies.

The premium was paid upfront as a single premium and they are saying i cannot have a refund on the policy now it has been cancelled.

Surely the FSA has to take all these insurance products into consideration?

I am been screwed from both angles, from the insurer saying they wont give a rebate to Blackhorse charging £300 in interest on it nearly %100 and charging me £25 a month in default charges as i am refusing to make the payments on the insurance.

Thanks

Jamesf81

Anyone any ideas on how i could take this forward?

Thanks

FlameCloud

Treacle1983 wrote: »

Hi, I work in insurance and in training people about the fsa/legal side of things.

Yes you only have a 14 day cooling off period (during which you can cancel for free) and they may charge a reasonable cancellation fee after that - most places is a months worth (fsa dosen't specify what 'reasonable' is.

But you will still be entitled to a refund pro-rata on the rest of it.

eg: home insurance £120, only insured for 1 month and cancel - you would have to pay a fee eg: £10 and would have been on risk/covered for a month so only get back £100 altogether.

Hope that helps.

You might want to read up on the FSA then, given you supposedly 'train' people in it. They consider fees of up to £50 reasonable.

Very few insurances paid monthly will ever be pro rata- all of the upfront costs of the policy are paid in the first few months so if you cancel after one month you would not get 11/12's of it back.

Jamesf81

The insurance i am talking about was paid upfront so there are no costs in first few months for them as they had the entire premium.

It is Blackhorse the car finance company who the monthly payments are been made to as they paid the dealer for the car and the premium.

It is the single premium policies paid up front the FSA has now outlawed and which i am wanting help with.

Jamesf81

Hi

After reading various articles by the FSA i beleive the decision not to refund any premiums if the policy is cancelled after the 14 or 30 day period comes under the Unfair Terms in Consumer Contracts (UTCCRs).

I would be interested to know if anyone else has taken GAP insurance through an insurer named Abraxas when purchasing cars on HP from dealers.

Alwayshappytohelp

If you write in to Blackhorse and ask them to cancel the insurance they will refund part of it onto the account on a pro rata basis. ie if you are 2 yrs into a 4yr period then you'll get roughly half the insurance back. Blackhorse will then claim the money back from the insurance company.