1st central overcharging when policy cancelled

jack111

Having had a policy with 1st central for two month I decided to cancel as changed vehicle and the quote offered was very high.

The policy document states a £30 cancellation charge. Which was fine.

My policy cost me approx £350 which would mean a monthly cost of £29. Have been using the policy now for less than 2 months.

The refund amount offered was £215 which equates to a cost of £135.

But 2 month usage which would be £29 +£29 plus the cancellation charge of £30 would be a total of £88 .

The person on the phone could not explain the discrepancy. Apart from say thats what the computer says.

why this discrepancy ?

Quentin

You don't just pay pro rata when you cancel.

The way they calculate the premium payable on cancelling should be set out in your documentation, but they should be able to itemise it for you, though knowing the company you are dealng with, don't hold your breath waiting for them to reply!

The charge does sound in the ballpark for such a short term, if that's any consolation.

shudder

The discrepency comes from the insurers short period cancellation scale, generally if your in your 1st year with an insurer you will get hit with these charges ie.

1 month = 30%
2 months = 40%
3 months =50%

The £30 charge will be the 1st centrals administration or cancellation charge

jack111

Nothing in the policy documents which gives your sliding scale.

20080912/CONTENT/PCPD/UW02/v1.0
ST CENTRAL
9.6 Cancelling your policy
You may cancel your policy at any time by telephoning us on 0845 194 9930.
Following receipt of your policy documents you have a 14 day cooling off period during which you may
cancel your policy provided no claim has been made and you have not been involved in an incident which
might give rise to a claim under the policy. Any premium paid will be refunded but we reserve the right to
make a charge to cover the costs of setting up the policy. If the policy is cancelled outside the 14 day cooling
off period a charge will be made. Details of these charges can be found on your schedule.
The insurers have the right to cancel this policy at any time by instructing us to send to you seven days
written notice at either the email or postal address last known to us. If a claim has been made during the
period of cover no refund of premium will be given by the insurers, otherwise the insurers will return the
premium paid less an amount for the time it has been in force. This applies in all circumstances regardless
of your premium payment method.
If you are paying your premium by instalments any outstanding premium must be paid within 10 days of
your policy being cancelled and delayed payment may incur additional charges. The current Certificate of
Motor Insurance must be returned to us in order to cancel the policy.
You may cancel this policy at any time by returning the Certificate of Motor Insurance. Cancelling the direct
debit instruction does not cancel the policy. Once we have received your cancellation request, provided
you have not made a claim during the period of cover the insurers will return any unused premium having
deducted our cancellation charge shown in the schedule.

In the policy schedule the below is present

The following charges may apply to your policy;
Adjustment Fee; If you make a change to your policy following the original issue you may be charged an admin fee of
£25.
Cancellation Fee; If you cancel your policy before the contracted date of expiry you will incur a £30 cancellation fee.
Administration Fee; We will charge a £25 administration fee for the creation and release of duplicate documents and
non standard letters.

Worth a try in the small claims court I feel. The lady on the phone said as part of the cancellation process I should destroy all documents electronic and paper sent by 1stdirect. [she did not specify a time frame] .

Quentin

jack111 wrote: »

Nothing in the policy documents which gives your sliding scale.

They do say this:

provided you have not made a claim during the period of cover the insurers will return any unused premium

How they calculate the "unused premium" seems not to be defined, but with you having been on cover less than 2 months you cannot expect the premium you owe to be simply calculated the way you have (ie expecting that 2 months will just cost one sixth of the annual premium).

At this stage a small claim would be a waste of your money.

Try and get them to put your mind at ease by itemising how they have reached the figure (£105 + cancel fee) they are charging you.

shudder

Technically the only thing you need to destroy is the motor insurance certificate.

I have just read through the policy wording and as you quite rightly state there is no reference to short period cancellation scales so one would assume that it would be on a pro-rata basis. This would make your calculations correct.

Have you tried making a formal compaint?

mikey72

If they have not stated a sliding scale of charges, they may well have messed up, so try for the pro rata refund, an formal complaint, followed by the FOS is the cheapest way to go first though.

bouncydog1

It also says that in order to cancel you must return the certificate of insurance - have you done that as they probably won't cancel until they physically receive it, which means your charge might increase.

What does the rest of the schedule say?

jack111

Yes have sent them a formal complaint via email.
They have given verbal confirmation that the policy has been cancelled.

How they calculate the "unused premium" seems not to be defined, but with you having been on cover less than 2 months you cannot expect the premium you owe to be simply calculated the way you have (ie expecting that 2 months will just cost one sixth of the annual premium).

Why ? . If they do not define it surely they are at fault and cannot make up some numbers later.

How do I upload the policy documents ?

Quentin

jack111 wrote: »

given verbal confirmation that the policy has been cancelled.

You cannot rely on verbals!

Separate to your issue over the refund, you ought to confirm the cancellation in writing to them (returning their cert). Use recorded delivery.

shudder

jack111 wrote: »

How do I upload the policy documents ?

Assuming that they are the same as the current documents on the website, simply a link will do:

http://www.1stcentralinsurance.com/download/PolicyWording.pdf

Check the reference number on the right hand side of the final page to ensure it is the same version.

From looking at this thread history a couple of people have already reviewed the policy wording (including myself). The most significant paragraph is this:

You may cancel this policy at any time by returning the Certificate of Motor Insurance. Cancelling the direct
debit instruction does not cancel the policy. Once we have received your cancellation request, provided
you have not made a claim during the period of cover the insurers will return any unused premium having
deducted our cancellation charge shown in the schedule.

In which case you will have to look at the charges stated in you schedule. If you want to post this then don't forget to edit the document and remove any personal data such as name, address, vehicle details etc. Then simply google free pdf/word hosting dependant on the format you edit the document in. Upload the document to their then post the link to here.

HTH