Cancelling Home Insurance - Fee??

divermoose

Would appreciate any advice.
I had a huge increase on my home building and contents insurance through existing provider. I did the search and found best price was with Swinton. I went through the process and went ahead online yesterday paying by debit card. The policy does not start until Wednesday this week. Phoned to cancel my existing policy and they matched the Swinton one. Safe to say I was not impressed with them but the cover is better and better the devil you know etc.
Phoned Swinton at 9am this morning and asked to cancel and they told me that there is a £50 cancellation fee. I have not received any details through the post or email to confirm the policy acceptance. But they want £50! I know read the small print!
Is there any way out of this? Do they have a right to take £50 without doing any work and without the policy even starting until Wednesday? Any advice would be appreciated!

Quentin

divermoose wrote: »

Is there any way out of this?

Not if it's in their small print - which you will have agreed by buying the policy!

dunstonh

Here is an extract from the Swinton terms of business. I have highlighted the bit appropriate:

Your right to cancel your insurance and your 'cooling off' period

You have the following rights to cancel any insurance you buy through us:

• You have a cancellation right which is set out in the policy document.
• You are also entitled to a 'cooling off' period, which ends 14 days after you receive your policy documents.

If your insurance is a travel insurance policy lasting less than one month, you do not have a 'cooling off' period. Any other cancellation rights will be shown in the policy document.ion rights will be shown in the policy document.
What you will be charged if you cancel your insurance

1) Within the 'cooling off' period
If you cancel your insurance, before the end of the 'cooling off' period, you will be charged by the insurer for the service they have provided up to the point of cancellation. We will also make a cancellation charge of £50. Our New Policy Inception or Policy Renewal service charge and any credit card handling charge made for arranging your insurance will not be refunded.
If we have given you a discount off your premium at inception this will be deducted on a pro rata basis from any refund due to you on cancellation. In addition any cashback received will be deducted from any refund due. Where a cancellation or other transaction results in a premium refund being due to you, that refund will be reduced by any service charge and any other sums you owe in respect of the policy.

divermoose

Thanks Dunstonh.

The only thing is that I have not received my policy documents, so my cooling off period has not even started yet!! So these terms apply the moment you press the proceed button. I can understand the £50 once a policy has started. I can almost see the need for a charge if all the paperwork has been completed. But an online process cancelled at the 1st opportunity as in 9am the 1st Monday before anything has been sent to me via email...seems tough!
Life is tough I know, but this constant take by anything to do with money is a drain! It looks like I will now have to cancel my existing insurance again...at least I have not paid anythign to them so cannot believe they can charge me a cancellation fee now!!! I am losing the will to live!!

Quentin

Your coolimg off period has started! (Not having received the docs means that you don't have an end date yet)

If you read up on what customers say about Swinton you might think £50 cheap to be clear of them should you need to claim!

mikey72

Never had any problem with Swintons, always good service as well.
They have also stated the cancellation fee well before I pay, so it is clear. I would never go back to a company that tried to rip me off at renewal, if they can afford to price match, that should be the price they offer first, not when they're caught out.

magpiecottage

FSA Rule ICOBS 7.1.1R says, "A consumer has a right to cancel, without penalty and without giving any reason, within:

(1) 30 days for a contract of insurance which is, or has elements of, a pure protection contract or payment protection contract; or


(2) 14 days for any other contract of insurance or distance contract."


I don't know if anybody has tried arguing the toss with an intermediary over whether the fee amounts to a penalty or what FOS would do if it went there but the rule is there.


It is up to you whether you want to try. To some extent I think if they have done the work they are entitled to payment.

dunstonh

I believe Swinton can make the charge as its at broker level. In a similar way a mortgage broker can charge a fee for admin if the mortgage doesnt go ahead (as long as its on their ToB).

At least that is how I have understood it in the past.

huckster

Divermouse

Phone the FOS and ask them about the ICOB, mentioned in Magpiecottages post.

It would interesting what their view is on this.

Personally I think £50 is too much for an internet arranged policy, for which cover has not started and you have not received the documents.

Yes it is in the TOB, but the fee must reflect the costs that Swinton have incurred. I think they would struggle to justify £50, more like £5.

mikey72

huckster wrote: »

Divermouse

Phone the FOS and ask them about the ICOB, mentioned in Magpiecottages post.

It would interesting what their view is on this.

Personally I think £50 is too much for an internet arranged policy, for which cover has not started and you have not received the documents.

Yes it is in the TOB, but the fee must reflect the costs that Swinton have incurred. I think they would struggle to justify £50, more like £5.

I always thought the £50 fee was excessive, but isn't that the amount set by the FOS?
It would be good though if the 14 day "penalty free" cancellation could be enforced.

lisyloo

It would be good though if the 14 day "penalty free" cancellation could be enforced.

It's an admin charge not a penalty.
I'm not sure if that's relevant, but legally speaking I believe there is a difference.