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Car insurance automatic renewal - is it legal?
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Anyway the FSA went through the policy with a fine tooth comb and found a few more inconsistencies then I saw. They made the insurer change their T&Cs
That would be consistent with some of the early FOS rulings which found some companies were not being making the auto renewal clear in the renewal letter. In those cases they ruled in favour of the consumer.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 -
It's legal for insurers to auto-renew policies
I complained to the FSA a few years back because the insurer I was with at the time had an auto-renewal policy where they didn't automatically send out letters and then made it difficult for you to cancel if you then didn't want this.
I wasn't caught out by this because I sent them a recorded delivery letter stating I didn't want this within one month of taking out my policy. However the insurer didn't answer my complaint letter properly about the other conditions I thought unfair such as why did I need to prove I had insurance somewhere else if I cancelled with them, I got p*ssed off and made a complaint to the FSA.
Anyway the FSA went through the policy with a fine tooth comb and found a few more inconsistencies then I saw. They made the insurer change their T&Cs
In short:
1. Auto-renew is legal and it needs to be mentioned in the Key Facts of the policy document
2. The insurer needs to send you a letter out before they auto-renew the policy. (However they don't need to prove you received it.)
3. If you want to cancel after the policy is auto-renewed the insurer can't ask loads of information like ask you to prove you have insurance elsewhere.
If the insurer breaks any of these conditions the policy could easily be considered unfair and so you should:
1. Put in an official complaint to the insurer in writing.
2. If your complaint isn't resolved and you lose out financially put in a complaint to the FOS OR
3. If your complaint is resolved but you are still p*ssed off send all documentation to the FSA
But can they charge you the £50 or whatever to cancel, or insist on using their "short term" rates, or some other sneaky fee?
If it wasn't a full, complete, everything I'd paid refund, I'd still take a punt on the £25 it would cost me to use moneyclaim online, if I could get the same insurance not on auto renew off the same company for usually about half the price. That's the bit that annoys me.0 -
Thank you for all your replies.0
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mikey72 wrote:If it wasn't a full, complete, everything I'd paid refund, I'd still take a punt on the £25 it would cost me to use moneyclaim online,.
Using MCOL to go to court would cost more than just the £25 you quote.
The £25 is just for issuing the claim. To continue to a court hearing involves another £25 (for claims up to £300). And if you lose at court, that £50 is lost too, and you would have to pay the defendant's expenses, as well as all your own!0 -
Vicar_in_a_Tutu wrote: »Surely the original contract I signed up for was one year's motor insurance, not to have it auto renewed.
Probably the best way of finding out is reading the contract you signed rather than asking on the interweb."We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein0 -
I have heard of people who have rang up to cancel the renewal, being renewed anyway and then the insurance company tries to charge a £50 cancellation fee as the new period of insurance has begun. The only 100% safe way is to write to them to cancel renewal and send it signed-for so as to arrive before the renewal date. A complete pain and very sharp practice by some insurers imho. Auto-renew should be opt-in by choice only.
I have another question. If my credit card is renewed during the year (same card company, same card number but different 3-digit security code and expiry date) and I don't tell my insurer of the new card details, would they still be able to auto-renew and charge my credit card based on the previous card's details?0 -
Yeh it happened to me, I was with Swift cover. I (stupidly) tried ignoring the letters thinking the £75 they took from my account would suffice as a settlement payment. They persisted in sending me letters for about 6 months. I then rang them and said that i renewed my policy with someone else and the gent on the phone agreed (assume he checked) and cancelled the policy. he also spotted that i had paid £75 and that id have it back within the week!
Good customer service and would be going back. If there premiums hadnt shot up by 43% (sorry swift, nice company though!!)0 -
If my credit card is renewed during the year (same card company, same card number but different 3-digit security code and expiry date) and I don't tell my insurer of the new card details, would they still be able to auto-renew and charge my credit card based on the previous card's details?
They may not be able to take the money, but that wouldn't stop them taking any remedy open to them (eg. cancelling the cover but pursuing you for cancellation fees and any premium due to cover the period before the cancellation).
You need to make sure you comply with the ts + cs/autorenewal conditions if you don't want to renew, not just prevent them taking the money.0 -
Thanks for the replies. I have notified them over the phone but of course the operator never gives their full name and later on if the insurance company claim I havn't cancelled, then I can't prove I did. Will have to write as well I suppose to make sure.0
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Thanks for the replies. I have notified them over the phone but of course the operator never gives their full name and later on if the insurance company claim I havn't cancelled, then I can't prove I did. Will have to write as well I suppose to make sure.
Do what I've started doing. My mobile has a handy "record" feature. So I can call on my land line (using the loudspeaker feature on the land phone) and use my mobile as a recorder next to the phone OR call on my mobile and record directly. Of course it isn't admissable in a court but I suspect that if there were any disagreement then the insurer would be hard pressed to outright deny the substance of the call.42 years of experience in the insurance industry.
And nothing the industry tries do to us surprises me any more!0
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