my financial advisor messed up my home insurance

katiepoppycat

MY financial advisor asked me when my homeinsurance was due. November was the response. He called me at theend of august and said he had a good deal and that I should switch before my next payment was due - a few days before. He recommended that I simply cancel the direct debit as that was the easiest way of doing it. My original insurance company didn't agree, sent me a couple of shirty letters and insisted on a prpoer letter. Because this took till the middle of the month I've recently received a bill for £35 - £15 worth of home insurance to the date when they received my letter and a £20 fee for cancelling before my year was up. I'#n furious.I've now only saved £11 on the whole year. I'm plannig to contact my finacial advisor today. What should i be saying to him? Other than this he's been really good

Bossyboots

Ultimately it was up to you to read the terms and conditions of your policy before cancelling. Your advisor at least should have known that you cannot end a contract simply by stopping a direct debit so he was wrong to tell you that. If it was me, I would ask him why he told you to stop the DD when all you are doing when you do that is breaching your contract terms. I expect his answer will be that you should have checked the T&Cs of the policy and short of arguing the point with him, I can't see that you are going to achieve anything. You could try asking him to pay towards the fees but you would have had the £20 fee anyway and you were covered for insurance in the days for which you were charged £15 so you haven't really made a loss.

dunstonh

Cancellation of direct debit doesnt cancel the contract. I would say that the majority of companies will treat a direct debit as cancellation, especially at renewal but you should never assume that to be the case and a letter should be fired off to the provider.

A further point is that an adviser shouldnt recommend a change of insurer mid contract and should wait until renewal. So, in this case, you should claim the costs against the adviser. It will wipe out most of his commission for the insurance this year so he wont be out of pocket.

katiepoppycat

Thanks! I guess i ended up with double cover that i didn't need. That'll teach me to assume people know what they're talking about and do my own research.

Sting_2

Arranging home insurance isn't that difficult, and can easily be done yourself - or if you are uncertain I am sure there are plenty of people on these boards who can help you.

Rather than using a financial advisor (and letting them make commission) why not sort it out yourself using a cashback website such as topcashback and make some money for yourself? I did mine through TCB and got £90 cashabck.

dunstonh

Rather than using a financial advisor (and letting them make commission) why not sort it out yourself using a cashback website such as topcashback and make some money for yourself? I did mine through TCB and got £90 cashabck.

It is an incorrect assumption that financial advisers are more expensive. I did a home insurance last week that was cheaper than all the ones that the person could find on the internet and supermarkets. We had someone posting in the pensions section last week that their IFA beat the annuity quotes that the person had looked up on the internet. Most IFAs can beat Cavendish on investments and HL on SIPPs if they want to.

Earning a commission is not a bad thing. Loads of companies online just keep that commission for themselves. Virgin pensions, for example, dont pay IFAs and their charges are easily beaten by IFAs who would be paid a commission for arranging a cheaper and better product. If you get value for money for the commission, then its worth doing.

In the last few days of this forum we have had someone that did their own mortgage and they now have a £1000 to pay that they were not expecting. We also had someone that did their own home insurance and didnt put accidental cover on their new one but was on the old one. They had a refused claim and didnt realise the new one didnt have accidental damage. If you know what you are doing and have the time to research and do it and accept full liability for errors then DIY is fine. Not using an adviser if you dont know what you are doing can be money well spent with a good adviser.

Astaroth

As dunstonh says, whilst they obviously do receive commission they also get a discount on the rate to start with so in many cases they are simply the same price as going direct. Of cause some decide to reduce the amount of commission they receive and so are actually cheaper than going direct and then again there are many companies that only sell through intermediaries and therefore there is no "go direct" option - the insurer/ bank only has to have a small B2B sales force and so have lower operating costs and so can charge less for their products.

I think what a lot of people on these forums also forget is that cheapest doesnt mean best. On my home insurance I could have saved £5 by going with another insurer but my home insurer includes AD cover on "entertainment equipment" where as the cheaper one didnt. For some people, even if you pay more than the direct model the piece of mind of knowing you have the right product for you is worth the extra cost (plus the safe guard of having the intermediary to go against if it turns out that it wasnt the right policy for you)

katiepoppycat

thanks for all the advice people - i rang my IFA and he said i should really have checked the t&cs but he would send me a cheque for the cancellation fee. so this is resolved and whilst I agree that you can get home insurance yourself and at a good rate, I don't mind someone having a commission if i end up with a better deal at the end of it.