Admiral Insurance Help

raskazz

vaio wrote: »

It's getting a bit OT now but the contract was for a years cover and to pay any valid claims arising in that period. Surely the contract isn't fulfilled until the year is up?

Agree with you about the slow grinding of case law changes, I suppose that's why we have the FOS who look at what's fair rather than the strict legal position.

Currently the FOS do state that this practice does not appear to be unfair:

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

"Similarly, the provision that premiums for an annual contract are not refundable if a claim has been paid does not appear to be unfair."

In other words as long as the correct contract term is included and it is worded in a clear and unambiguous way then then it is not an unfair term.

To go back to the OP's predicament, the additional cancellation charge on top of the full annual premium is a bit rich. A written complaint would see it waived, I'm sure.

mikey72

raskazz wrote: »

Currently the FOS do state that this practice does not appear to be unfair:

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

"Similarly, the provision that premiums for an annual contract are not refundable if a claim has been paid does not appear to be unfair."

In other words as long as the correct contract term is included and it is worded in a clear and unambiguous way then then it is not an unfair term.

To go back to the OP's predicament, the additional cancellation charge on top of the full annual premium is a bit rich. A written complaint would see it waived, I'm sure.

That would probably be the best outcome in this case, particuarly as Admiral have already allowed the insurance to be transfered onto a new car after it paid out on the original car on the policy.

As an aside, it's well worth bookmarking this particular FOS page, as it also stresses the general principle of a pro rata refund, (plus a reasonable fee) if insurance is cancelled mid term, and won't normally allow a punative fee, or a different "short term" rate to be imposed. (subject to no claim being made).

raskazz

mikey72 wrote: »

and won't normally allow a punative fee, or a different "short term" rate to be imposed. (subject to no claim being made).

It doesn't quite say that; they do state though, that where short-term rates are used or cancellation fees are levied, they expect the insurer to demonstrate that the effect on the consumer is not disproportionate. Where the insurer can demonstrate this, complaints will not be upheld - for example, see the rejected complaint at the bottom of the page

mikey72

raskazz wrote: »

It doesn't quite say that; they do state though, that where short-term rates are used or cancellation fees are levied, they expect the insurer to demonstrate that the effect on the consumer is not disproportionate. Where the insurer can demonstrate this, complaints will not be upheld - for example, see the rejected complaint at the bottom of the page

I wouldn't be happy with a £50 fee, but then again it's about the maximum that is allowed.
So as the complaint was raised after getting a pro-rata refund, but being charged £50, it's not unexpected him complaint was rejected.

Now the one above though, no refunds after 4 months cover, that was well worth a complaint. Pro rata refund imposed, subject to a reasonable fee.

vaio

raskazz wrote: »

Currently the FOS do state that this practice does not appear to be unfair:

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

"Similarly, the provision that premiums for an annual contract are not refundable if a claim has been paid does not appear to be unfair."

In other words as long as the correct contract term is included and it is worded in a clear and unambiguous way then then it is not an unfair term.

To go back to the OP's predicament, the additional cancellation charge on top of the full annual premium is a bit rich. A written complaint would see it waived, I'm sure.

This is where it gets messy & confusing, you are of the opinion that the cancellation charge is unfair and would probably get waived if a complaint was lodged, but also of the opinion that taking the whole premium when only 6 months cover has been provided is not unfair.

Both are (I presume) clear and unambiguous terms in the contact and it’s certainly arguable that one, if not both are unfair.

Actually, following that well known insurance company maxim that people who have claims (even non fault claims) are more likely to have another (and thus get loaded) it’s arguable that the remaining time on the policy represents a higher (and therefore more expensive) risk than the insurer charged for initially and so you’d have thought the insurance company would have been pleased to shed that risk at the original price.

raskazz

vaio wrote: »

This is where it gets messy & confusing, you are of the opinion that the cancellation charge is unfair and would probably get waived if a complaint was lodged, but also of the opinion that taking the whole premium when only 6 months cover has been provided is not unfair.

Both are (I presume) clear and unambiguous terms in the contact and it’s certainly arguable that one, if not both are unfair.

Actually, following that well known insurance company maxim that people who have claims (even non fault claims) are more likely to have another (and thus get loaded) it’s arguable that the remaining time on the policy represents a higher (and therefore more expensive) risk than the insurer charged for initially and so you’d have thought the insurance company would have been pleased to shed that risk at the original price.

I don't really see any inconsistency there myself. Polices are rated on the basis that the policyholder has an x% chance of incurring £y of costs at some point over the next year. Now whether that point is on day 1 or day 365, the policy has served its purpose so the full premium is due.

The only alternative to this would be making everyone pay higher premiums to effectively subsidise those who makes claim and then chose to cancel. As a careful driver myself I would not agree that that was fair.

To the letter of the contract terms the OP's insurer can levy the cancellation fee; I do not think it will stand because the insurer has retained the full annual premium due to the claim and the marginal extra admin is negligible compared with the costs of processing the claim.

vaio

I think a reasonable cancellation fee is fair but lack of a refund isn’t

Say the OP insurance cost £120 so £10 a month.

A claim was made after 6 months which will produce a 50% loading on future premiums. I’m thinking the risk the insurance are exposed to for the remaining 6 months is now worth £15 a month and it’s good for the insurance company if they can shed that £15 a month risk by paying £10 per month refund.

On the fairness grounds, if you and I both have claims 5 months in. I cancel at the 6 month point and you don’t. It can’t be fair (from either punter or insurance company point of view) that we both pay the same premium but you get 12 months cover and I get 6 months, can it?

Wig

Flyboy152 wrote: »

All of that gets sent with the renewal letter.

How do you know? You have said that you have used auto renew Admiral before and presumably you had an auto renew letter, but presumably the letter says something like

"your policy is due to renew on 31st Dec 2010, we will be auto renewing this policy as you agreed when you took out your policy with us, we will charge to your credit card, if you do not want this renewal to take place please contact us"

They will assume to be able to charge the credit card so I don't see any scope for a wording laying out a demand for payment (because there will be an assumption of payment being collected) and a warning of 7 days cancellation..... So as you know this can you give us the exact wording?

How do they give 7 days notice of policy cancellation on a renewal letter which will be sent something like 14 days in advance of renewal i.e. on a policy that does not yet exist?

Are you sure you know what you are talking about?

Wig

unclecrispin wrote: »

Thanks for your replies everyone.

I think what I'm going to do is ring them up and explain that I just can't afford it, I'm a student etc and if anything it's going to be worse for them because I will be telling all my friends not to use them.

It's not the £45 fee I don't agree with, it's the fact they're adding that to 3 months unused insurance that they refuse to give me a cut of. I am only asking to not have to pay any more, I accept I won't get any money back off of them for the 12 months premium.

And I believe I have told the whole story here, my first car was written off but I sold the second one, and it is because of the first crash that they won't give me any money, because it is still on the same years policy.

Thanks again for all your replies

Actually it is the £45 that you don't agree with. You don't agree with it being added on as an excuse to demand from you further payment on a policy that you will not be recieving any refund from. Had there been a premium refund I'm sure you could accept the cancellation fee being deducted.

Make sure you escalate it into an *official complaint* that you will only accept from them either a dropping of the charge or a referral to the omvbudsman. If you do this I hope you will get it cancelled, if you don't, you haven't lost anything.

And you can use the argument put forward by the last case study at the bottom of the page linked to by Raskazz, That insurance companies must build in administrative costs within their premiums. Your policy was 9 - 10 months old so long enough for them to have recouped their admin costs, on top of that you were not recieving any premium refund, they had retained the whole premium.

unclecrispin

ok, this is all great, i just have one more question though, if i take it to the FOS and they reject it do I have to pay any more? Or is it still just the £45 that I would owe Admiral anyway?

Thank you so much for all your replies