Feel Ripped Off! Any Advice??

Archers

I recently upgraded my car & rang my insurance company (Hastings) to get the new car covered. They informed me that it would cost an additional £47 per year. I double checked it was "per year" which was confirmed & I said that was fine as it was only an extra £4-ish per month (I pay by monthly direct debit).

Next thing I know I get a letter from Hastings not only confirming the new premium adjustment, but stating that the last 2 payments left on this year's insurance had gone up from £16 to £40.57!! I rang them to query it & they said that as I only had 2 months left to go they had no choice but to spread the premium adjustment over the 2 months only whereas normally it would be spread over 12 months. Can they do this??

A friend then pointed out that I should cancel the insurance with Hastings & get a new quote from someone else. So that's what I did...apart from Hastings aren't playing ball. They're insisting that I still pay them the "outstanding" £81 (as they put it). I tried asking them why I had to pay them for the 2 months I wasn't going to be insured by them, but they insisted it had to be paid. Can they do this??

Shouldn't the new premium adjustment have been added pro rata instead of lumping a whole 12 month's worth onto the 2 months I have left? Is there anything I can do to get out of this horrible mess?

Any help will be greatly appreciated.

Many thanks.

mattymoo

When you buy a policy you buy one year of cover. Some people pay up front but you chose to spread the payments. Its a bit like buying a car on finance, selling the car and wondering why, now you don't have the car you still have to pay off the finance.

Blunt truth over with.
Many insurers do allow you to cancel early but the cost of setting up a policy, issuing docs and doing all the usual underwriting checks is front end loaded. If you cancel after 3 months you may well end up paying the equivalent of 6 months cover. At 10 months, it is likely to be the full years premium needed to cancel early.

As to the extra premium, I suspect the additional £47 may have been worked out as the additional premium for the current year, i.e. the 2 months you had remaining.

If your question had been "How much will my premium be next year for this new car?" I suspect they would not have been able to tell you because the renewal calculation are normally only done 4-6 weeks in advance.

If you have not purchased alternative cover, I would suggest going back to Hastings, reinstating cover for the remaining 2 months and then shopping around at renewal for a better deal.

Astaroth

The AP will have been not for a complete year but what remains of this year - and I suspect it isnt all AP but also an admin fee as well for a mid term alteration.

You only have a right to cancel an insurance policy within 14 days of purchasing it, after that it is down to the individual insurer to decide if you can cancel and if you can what fees they charge you for doing it. If you go on a 3 week holiday and decide you want to come home after 1 week, would you expect the holiday company to refund you the remaining 2 weeks?

There is little point in cancelling a policy which is going to cost you the same irrespective if you let it run to term or cancel it now but just remember to shop around nearer the time of renewal.

miaxmia

Astaroth wrote:

The AP will have been not for a complete year but what remains of this year - and I suspect it isnt all AP but also an admin fee as well for a mid term alteration.

When my daughter's insurance renewal came through last year, we decided to up the mileage by 2,000 as she was doing more than she had anticipated. Didn't realise that we would then be charged an increase for the current year that only had about 10 days to run plus a small increase for the increased mileage on the renewal. It transpired that it was about £4 extra premium for the increased mileage and about £25 admin. fee for the period that only had 10 days to run. I was fuming at the time, but the telephone operator said that, if we didn't change it for the current year, she would note it that we had said my daughter had increased her mileage and, therefore, wouldn't be covered for the last 10 days of her existing policy! It seems to me that you can't win.

Astaroth

The best bet is to be cautious and slightly over insure - pay a little more now but save the risks of being underinsured or having to pay an admin fee for mid term alterations. The difference is that now insurers have to tell you that the increase is X including an admin fee of Y where as before FSA ICOB rules came into force they could simply say it is an AP of Z and not mention that it included an admin fee.

djohn2002uk

Astaroth wrote:

The best bet is to be cautious and slightly over insure - pay a little more now but save the risks of being underinsured or having to pay an admin fee for mid term alterations. The difference is that now insurers have to tell you that the increase is X including an admin fee of Y where as before FSA ICOB rules came into force they could simply say it is an AP of Z and not mention that it included an admin fee.

In my opinion "the best bet" is to go with a decent company in the first place instead of getting hooked into a frantic search for the cheapest quote you can find. Then you avoid these problems later on. Are we all to be expected to only change our car at the end of the term of cover? Utter nonsense, just another scheme to get more money out of the customer by these "cheap" companies who have to get their money back somehow.
I use Frizzell who use Liverpool Victoria and never have I ever been charged anything for changing my car midterm even when I changed twice in 2004. In fact I have even been reimbursed when I changed to a lower group car.
The same applies to the purchase of insurance as any other product, You Get What You Pay For!

Astaroth

I agree that you get what you pay for but it can also be difficult to tell. In 2004 FSA ICOB hadnt come in and so there was no need for an insurer to mention about AP.

For the insurer I was working for then, if you had a premium of say £500 with us and called to change the vehicle mid term to a lower car which dropped the premium to £375 but we charged a £25 admin fee we would have simply have said that your new premium is now down to £400 and we'll get a cheque for £100 in the post to you (or words to that effect). The customer was happy and so was the insurer

I am certain that liverpool victoria do now admit to charging an admin fee as a friend was complaining about it the other day.

Gingham_Ribbon

I can't see how they can charge for a full year if you want to cancel mid year. I cancelled 6 months into a policy because I found a much cheaper quote when I found this site and did some searching. It was worthwhile for my to lose 6 months no claims as you only get them for full years.

I don't think you should have to pay for cover you don't have. If you've 2 months to go on it and want to be with another insurer, it's not possible to have 2 policies running at the same time, so surely they can't have you pay for it? I would contact the insurance obudsman.

But be careful, if you have a no claims bonus, you may lose this year's because you won't complete a year with them, so find out if it'll be worth it first.

Astaroth

Gingham Ribbon - you only have a right to cancel the policy within the first 14 days from either buying it or receiving the documentation (which ever gives you most time). After that it is at the discretion of the insurer.

If you went for a 3 week holiday and just decided 1/2 way through it that you wanted to be Egypt rather than Kenya and with Thomas Cook rather than Thompson would you expect Thompson to give you a refund for the remaining 1.5 weeks holiday?

---lee---

Archers wrote:

Next thing I know I get a letter from Hastings not only confirming the new premium adjustment, but stating that the last 2 payments left on this year's insurance had gone up from £16 to £40.57!! I rang them to query it & they said that as I only had 2 months left to go they had no choice but to spread the premium adjustment over the 2 months only whereas normally it would be spread over 12 months. Can they do this??

I've worked on insurance systems for many years and I suspect that you will have been charged an admin fee. I would call them and clarify if part of this payment is an admin fee.

Also, insurance companies tend to charge really high interest for monthly payment. It's best to pay in full or even charge to a credit card. The credit card APR is likley to be lower than the insurance provider. Another good reason not to get tied into monthly payments is that the policy has to be settled in full if you claim.