Automated Insurance Renewal

Bishopstone

Towards the end of last year my electronic diary reminded me that my £240 home insurance policy was coming to an end. Due to being unemployed, with a Jobseeker and pension combined income of £65 per week, I could not afford it, so I let it lapse. Or so I thought!

Last month I received two letters in the same post. One from my Bank and one from my Broker. Both letters informed me of being charged for a failed Direct Debit in relation to my home insurance policy.

When I contacted the Broker I was informed, "If you had read the small print in the policy you would know that we can opt to renew your policy if you do not specifically request that it be cancelled at the expiry date". He further continued by saying that they obtained a number of quotations on my behalf and opted to go for a renewal for £1,800 per annum, to replace the expired £240 one!

Without my knowledge, they increased my Direct Debit from £20 per month to £134 per month. This represented over 50% of my income! It was only after four payments had been taken that my current account ran dry! :mad:

Strange, with this particular Broker I receive phone calls prior to renewal for my car, motorcycle, break-down, etc., etc.; in addition to the usual letters. I have 20 years of such paperwork. However, in relation to my home insurance I received no phone calls, no reminder letter; nor a copy of the policy after renewal!! :mad:

Additionally, I was informed that if I wanted to now cancel the home insurance I would be required to pay the missed Direct Debit and pay their charge for a missed Direct Debit in addition to a £200 administration cancellation charge. If I did not pay to cancel the policy, said charges would increase on a daily basis! :mad:

End result, it cost me nearly £1,000 in respect of a home insurance policy that I did not know existed in the first place.

The FSA, Insurance Ombudsman's Office and my Bankers have all told me to, "Read the small print in future". They were unable to assist in the recovery of my losses.

Nice people to do business with?

nomoreheroes

Unfortunate oversight by you but I cannot understand why you had not checked your bank statement for four months.

mikey72

They're in breach of FSA guidelines for not sending letters, renewal offers, and the price, beforehand.
They wouldn't be "treating the customer fairly" if you could get a similar insurance much cheaper, and the FOS should consider a complaint.

Several papers have good financial investigative journalists, one of them maybe, and your local MP, as it's such as excessive amount to increase by.
(I don't think anyone could defend £240 to £1800 for the same property)

Who's the broker?

Barstaple

I feel sorry for you and it is simply a wrong perception of the policy subject which is contained in the contract itself. I think the company should inform the insured person about the terms and conditions of the policy expressively.

dunstonh

The way you have written is very one sided.

The fact that you said "The FSA, Insurance Ombudsman's Office and my Bankers have all told me to, "Read the small print in future". They were unable to assist in the recovery of my losses." Suggests that there is a little more to it than you are telling us as the FOS have a very clear position on auto-renewals.

Whilst it is entirely possible for the scenario you give to occur if a firm has not acted correctly, I can't see the FOS just taking that at face value given their approach. Plus the amount of paperwork that would have turned up over multiple posts, including some sent via broker and direct from insurer along with the direct debit notification where they are required to inform you in writing of amount changes.

I am not taking sides. I am partly playing devils advocate and I am also looking at it from the four truths principle. What you say happened, what they say happened, what really happened and how the information available suggests what happened. We have you side only. None of the rest.

I fear that trying to persuade a complaints handler at a firm or an adjudicator at the FOS that you received nothing was probably asking too much for them to believe. One envelope not arriving is a possibility. However, multiple envelopes from multiple sources not arriving is highly unlikely.

Clive_Woody

One additional note is that if your property is mortgaged I would imagine the T&Cs of the mortgage would require you to have buildings insurance in place as a minimum.

Bishopstone

dunstonh wrote: »

The way you have written is very one sided.

The fact that you said "The FSA, Insurance Ombudsman's Office and my Bankers have all told me to, "Read the small print in future". They were unable to assist in the recovery of my losses." Suggests that there is a little more to it than you are telling us as the FOS have a very clear position on auto-renewals.

The FSA's stated that if the records of the Broker are marked, "Sent" - that is compliance. No proof of posting or delivery is required.

Whilst it is entirely possible for the scenario you give to occur if a firm has not acted correctly, I can't see the FOS just taking that at face value given their approach. Plus the amount of paperwork that would have turned up over multiple posts, including some sent via broker and direct from insurer along with the direct debit notification where they are required to inform you in writing of amount changes.

Thank you, you have raised a valid point. The Broker claims that they 'held back the paperwork because of the inordinate rise in premium, but their file was marked, "Sent". I received no Direct Debit updated information. I have no doubt in my mind that the paperwork, in its entirety, was held back initially, and then NOT sent! As you stated, one letter to go missing - OK, but the initial renewal reminder, the confirmation, the Direct Debit notification and the actual policy makes FOUR letters, all from the same place!

I am not taking sides. I am partly playing devils advocate and I am also looking at it from the four truths principle. What you say happened, what they say happened, what really happened and how the information available suggests what happened. We have you side only. None of the rest.

Agreed.

I fear that trying to persuade a complaints handler at a firm or an adjudicator at the FOS that you received nothing was probably asking too much for them to believe. One envelope not arriving is a possibility. However, multiple envelopes from multiple sources not arriving is highly unlikely.

Agreed. Which is why I reached an impasse and paid up!

Thanks for your input!

Bishopstone

Clive_Woody wrote: »

One additional note is that if your property is mortgaged I would imagine the T&Cs of the mortgage would require you to have buildings insurance in place as a minimum.

Yes, thanks.

The good news, I own it outright.

The bad news, if it burns down tonight, I am stuffed!