Cancelation fee robbery!!!

kittikat111

I previously set up an insurance policy with an insurance company called 'Insure Your Motor'... Because of my age and the car that i had and points, my annual insurance was very high just over £4000 pa. I was charged £1100 as a dep when i first set up my policy and monthly premiums were around £300-£400.

After researching the company online i found soo many people complaining about them and their services. I eventually found myself a cheaper deal and decided to cancel my policy.

A few weeks later i received a letter asking for £1,500 cancellation fee :mad: !!!!! I seriously couldn't believe what i was reading i had the policy for just over 2months! Thats over £3000 to be insured for such a short period of time.

I refused to pay the fee and have recently received letter from a debt company called 'Grosvenor' trying to get the money from me but i dont know where i stand on this? I'm 20 years old and no longer in the position to pay this kind of money to a company who already received alot of money from me for only being insured with them for 2months! Surly no company can charge this much for a cancellation fee are they within their rights to do this?

dacouch

Here are the relevant terms and conditions from Insure your motor https://insureyourmotor.quoteexchange.co.uk/terms.php?brand=iymnew

mikey72

Make a complaint, then complain to the FOS. Have a read of

https://forums.moneysavingexpert.com/discussion/comment/39938318#Comment_39938318

Dave101t

complaining wont help, you were given the facts and terms, you accepted and you cancelleled and are now looking for a way to dodge their legal fee. dont let them take you to court, you will get a ccj to go with everything else.

mikey72

Dave101t wrote: »

complaining wont help, you were given the facts and terms, you accepted and you cancelleled and are now looking for a way to dodge their legal fee. dont let them take you to court, you will get a ccj to go with everything else.

You must be the dream customer.
An unfair t&c doesn't make it legal just because it's there. The FOS can arbutrate in cases like this.

Give them a ring to get advice.

http://www.financial-ombudsman.org.uk/

0800 0 234 567

lisyloo

Aren't there any test cases on short term rates yet?

dunstonh

A few weeks later i received a letter asking for £1,500 cancellation fee

No they havent. The FOS generally allows cancellation fees of up to around £50. More likely is that you have a cancellation fee AND a period of insurance premium to pay and if you bought any addons (like legal cover or RAC/AA etc) then they are chargeable in full and cannot be cancelled.

my "opinion" is that their premium due rates for cancellation are on the high side. However, they do meet the FOS criteria of being published. All they have to do is justify them to the FOS and 40% in month two is not going to be that difficult to justify

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

dont let them take you to court, you will get a ccj to go with everything else.

The fact it has been passed to a collection agency probably already means he has a default showing on his credit file. Not something you want at age 20. 6 years of getting no credit or mortgage.

trulymiserable

Can i ask a silly question , if you were to cancel the direct debit for a monthly paid car insurance and they demand the £75 cancellation fee still.. whats the worst they can do , eg send baliffs take you to court ? anyone know?

dunstonh

trulymiserable wrote: »

Can i ask a silly question , if you were to cancel the direct debit for a monthly paid car insurance and they demand the £75 cancellation fee still.. whats the worst they can do , eg send baliffs take you to court ? anyone know?

Actually, yes the bailiffs and court are possible outcomes as the monthly premium is nearly always handled under a credit agreement.

Usually, its a case of knackering your ability to get credit for 6 years by getting a CCJ lodged.

whatmichaelsays

dunstonh wrote: »

Actually, yes the bailiffs and court are possible outcomes as the monthly premium is nearly always handled under a credit agreement.

Usually, its a case of knackering your ability to get credit for 6 years by getting a CCJ lodged.

On top of that, cancelling your direct debit without settling any outstanding debts will usually mean that the insurer cancels your policy for you. If that does happen, you will have to declare that you have has a policy cancelled to other insurers and once you do that, the chances of you getting anything resembling a reasonable quote for insurance in the future will be slim to none.

trulymiserable

Thanks for the advice as im on a debt management plan anyway my credit rating is already shot but wouldnt want the baliffs or to admit the insurance had been cancelled, think it maybe a cheaper option to let the policy run rather than to cancel it.