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Time to stand up to the rip off merchants?
trickyt66
Posts: 13 Forumite
Having just found out the my current insurer one one of my vehicles is going to charge me £38.00 to cancel my insurance ( because i have sold the unwanted vehicle ) or, if I wish to stay with them, £30.00 to modify the policy.
As usual the documents follow the on line purchase and no doubt somewhere in there in microprint will be thier t and c's detailing these absurd and disgusting charges. I have to admit to having not seen these and when challenging their representative on the phone this morning, was told it was a verbal contract, not a wriitten one. I apprecite there will be those who are reading this and saying, "well you get a cheaper premium on that basis and you should find out all of the facts first. Fair enough, but come on people, is it not time to bring these thieves to bear? This is exactly like the banks and there unjustifiable charges.
Is there a template out there already for trying to get these insurance companies to reduce, if not waiver their charges. How can they legally justify £30.00 to cancel a policy that was paid in full up front.
Comments and suggestions would be welcome.
Very angry about this, seems we are all to just be ripped off all over again.....
Rich
As usual the documents follow the on line purchase and no doubt somewhere in there in microprint will be thier t and c's detailing these absurd and disgusting charges. I have to admit to having not seen these and when challenging their representative on the phone this morning, was told it was a verbal contract, not a wriitten one. I apprecite there will be those who are reading this and saying, "well you get a cheaper premium on that basis and you should find out all of the facts first. Fair enough, but come on people, is it not time to bring these thieves to bear? This is exactly like the banks and there unjustifiable charges.
Is there a template out there already for trying to get these insurance companies to reduce, if not waiver their charges. How can they legally justify £30.00 to cancel a policy that was paid in full up front.
Comments and suggestions would be welcome.
Very angry about this, seems we are all to just be ripped off all over again.....
Rich
0
Comments
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You paid up front for an annual policy.
You opted to change the policy and thus agreed to the terms for doing so. Insurers quote bottom line price which strips out general customer service etc on the basis most wont use it; they then recoup these costs from the people who do use them by charging admin fees.
You have no right to be angry as given insurance is an annual contract there is no right to change cars or cancel and thus by allowing you to do so they are being far more flexible than they need to be.0 -
Right, so you sound like you work for one of them. I take your point but justify £30.00 cancellation charge to me. The banks did it and were found guilty, insurance companies are no different. £10.00 for the broker to make a phone call and send an e-mail to the insurer. Refund of premium monies due is electronic and costs pennies, sruggling to get to £30 here.0
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The charges are in line because its not just a case of pressing a few buttons.
If you add all the admin costs up.
Wages
rent of the building
telephone systems to pay for
insurnances to pay for
stationery
heating
lighting
electricity
and a thousand and one other things.
That is what the charges consist of............make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
Right, so you sound like you work for one of them. I take your point but justify £30.00 cancellation charge to me. The banks did it and were found guilty, insurance companies are no different. £10.00 for the broker to make a phone call and send an e-mail to the insurer. Refund of premium monies due is electronic and costs pennies, sruggling to get to £30 here.
It's how the insurer makes money, most of the premium is spent on other things, marketing, running costs, wages, claims etc etc... It's in the T&C which you agreed to, I know everyone has said it but... you don't have a leg to stand on unfortunately!0 -
Well lets just hope you dont loose your job, have to sell your car and then get kicked in the teeth by your insurers. Not me by the way but I am sure there are plenty of unfortunate souls who have had this happen. You cannot win either way, they get you on extortionate premiums and no charges or lower premiums and then screw you later. What a great world we live in eh!!?0
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You choose to insure with a company that has cancellation charges, you choose to accept the premium they offer =/0
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As usual the documents follow the on line purchase and no doubt somewhere in there in microprint will be thier t and c's detailing these absurd and disgusting charges.
Please confirm which insurer we are discussing here, then we can investigate how clear the charges are. I suspect that you will find that the details on mid-term amendment fees and cancellation terms will be in exactly the same size print as all the other crucial contract terms, but we shall see.I have to admit to having not seen these and when challenging their representative on the phone this morning, was told it was a verbal contract, not a wriitten one.
The form that contract takes is not relevant to this matter.I apprecite there will be those who are reading this and saying, "well you get a cheaper premium on that basis and you should find out all of the facts first. Fair enough, but come on people, is it not time to bring these thieves to bear? This is exactly like the banks and there unjustifiable charges.
This is nothing like 'the banks and there unjustifiable charges'(sic). The legal challenge to bank penalty fees was under the Unfair Terms in Consumer Contracts Regulations, which broadly states that penalties imposed on consumers for breach of contract cannot be greater than the costs to the firm of that breach. The insurer fees which you mention are not penalties for breaches and so do not fall under the same piece of legislation. In any case, you should be aware that the OFT actually lost its legal challenge to banking penalty fees in the Supreme Court.Is there a template out there already for trying to get these insurance companies to reduce, if not waiver their charges. How can they legally justify £30.00 to cancel a policy that was paid in full up front.
They can quite easily justify it because almost all their costs in concluding the contract are at the front end of the contract. Margins and costs are calculated over the lifetime of the policy so if you sign a contract for 1 year of insurance you should not reasonably expect to be able to break the contract without any fee.0 -
Because the alternative method is less fair and explicit charging is the most fair option.How can they legally justify £30.00 to cancel a policy that was paid in full up front.
The alternative is all policyholders pay for your costs and its bulked into the premium as it used to be. So, the argument then is why should others pay for the costs you have created by not going for the full term.
Of course, they can easily justify it as the costs are mostly incurred up front and the profit, what little there is, only happens if you go full term.
Irrelevant.Well lets just hope you dont loose your job, have to sell your car and then get kicked in the teeth by your insurers.
Yes. It is so bad that you get consumer choice and the ability to make your own mind up which you feel is right for you.You cannot win either way, they get you on extortionate premiums and no charges or lower premiums and then screw you later. What a great world we live in eh!!?
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 -
Right, so you sound like you work for one of them. I take your point but justify £30.00 cancellation charge to me. The banks did it and were found guilty, insurance companies are no different.
Read my post above. Insurer amendment fees and cancellation charges are a totally different proposition to banking penalty fees, and the banks were not in fact 'found guilty'.£10.00 for the broker to make a phone call and send an e-mail to the insurer. Refund of premium monies due is electronic and costs pennies, sruggling to get to £30 here.
You need to understand the economic principle of marginal costs and average costs. Yes, each individual cancellation transaction has a low marginal cost but the fixed costs of buildings, IT infrastructure and support, utilities, wages, training, HR, management, auditors etc that need to be implemented to allow each transaction mean that a £30 average cost per transaction can quite easily be justified.0 -
You cannot win either way, they get you on extortionate premiums and no charges or lower premiums and then screw you later. What a great world we live in eh!!?
As you are clearly such an expert on the motor insurance market, could you please clarify specifically why you say that premiums are 'extortionate'? Please reference published data on market profitability in your answer.
If you wonder why things are as they are, your ire would be better directed at consumers who have blindly chased the lowest price regardless of quality. This has led to insurers removing customer service costs from those premiums you see so nicely ordered on comparison sites, and explicitly charging for them separately according to the amount of demand that consumers actually place on their services.0
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