Car Insurance cancellation charge £102.31!

debsleypig

Thanks for all the advice. As I said before, I am okay with paying the £55 cancellation charge, I am not happy to pay an extra £50 or so on top of this. I haven't made any claims during the period of insurance.

Will deffo still fight it and put in official complaint, then go to the financial ombudsman if no luck. Really don't see why I should be paying them £102 when there was only £78.58 left to pay on the policy!

If anyone has had any luck in fighting these sorts of situations, let me know.

dunstonh

The main thing I want to know is about the FOS stating that around £50 is a fair cancellation charge. Is this written down anywhere? Or does anyone have a similar experience?

The FOS publish samples of complaints. There has been one entry covering the administration/cancellation fee and that was at a level of £50. They rejected the complaint. So, we know that they accept up to £50. However, it does not mean they reject those more than that. We just don't have any evidence to show they accept higher figures.

In this case, the cancellation charge is £55. It is highly probable that they would accept that given how close it is to the £50 we know they accept.

As for premium refunds, which is what your main issue seems to be, the FOS expect it to be near pro-rata but not exact. So, +1 or +2 months would not really be unreasonable. Plus, if you used credit you may have outsanding credit charges to pay and if you had legal expenses cover or breakdown cover then these are normally non-refundable. So, on early cancellation with monthly premiums, you have to pay these up to the end of the year.

We only know what the FOS consider bad on premium refunds. Not what they consider acceptable. They have indicated but not stated. So, the reality is that no-one here can say with absolute confidence the outcome of any potential complaint. We can just guess.

debsleypig

dunstonh wrote: »

The FOS publish samples of complaints. There has been one entry covering the administration/cancellation fee and that was at a level of £50. They rejected the complaint. So, we know that they accept up to £50. However, it does not mean they reject those more than that. We just don't have any evidence to show they accept higher figures.

In this case, the cancellation charge is £55. It is highly probable that they would accept that given how close it is to the £50 we know they accept.

As for premium refunds, which is what your main issue seems to be, the FOS expect it to be near pro-rata but not exact. So, +1 or +2 months would not really be unreasonable. Plus, if you used credit you may have outsanding credit charges to pay and if you had legal expenses cover or breakdown cover then these are normally non-refundable. So, on early cancellation with monthly premiums, you have to pay these up to the end of the year.

We only know what the FOS consider bad on premium refunds. Not what they consider acceptable. They have indicated but not stated. So, the reality is that no-one here can say with absolute confidence the outcome of any potential complaint. We can just guess.

Many thanks for the detailed response. That's really helpful.

mikey72

Take a look at

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

this has previously rules that refunds should be pro rata, and a fee of £50 to cancel is aceptable.

No mention of
Additional product charges: 26.99.
Arrangement fee: 5.00.

So the premium refund should be in the order of £60 if there are two months to run. You could write a letter of complaint, and threaten to complain to the FOS, it's free to you, and they may agree that just taking the two remaining payments would be fairer costwise, or just the cancellation fee.



The additional product charges (legas expenses, car hire?) usually state are not refundable, but as they are cancelled with the main policy it could be worth challenging that also, as that doesn't seem fair either.
Either way it's £40 or £50 against the cost of a stamp.

debsleypig

Thanks! I will take a look at that.

dunstonh

this has previously rules that refunds should be pro rata,

it doesnt say that.

In cases referred to us, if a customer has cancelled a policy and received a significantly smaller refund of premiums than could be expected as a pro rata settlement, we will ask the firm to explain how its approach complies with the requirements under the regulations.

That indicates that they will ask the insurer to explain their charging structure if it is a significantly smaller refund than pro-rata. It does not mean they will uphold the complaint if it is not pro-rata. A +1/2 month adjustment is not going to require much explanation. It may not even need an explanation as its not significant. Indeed, chances are the FOS already have already had to look at a number of companies and have a list of whether their terms are acceptable or not.

mikey72

"Indeed, chances are the FOS already have already had to look at a number of companies and have a list of whether their terms are acceptable or not. "

That'll make the answer to a complaint even swifter when one is made then. Even more reason to submit one.

dunstonh

mikey72 wrote: »

"Indeed, chances are the FOS already have already had to look at a number of companies and have a list of whether their terms are acceptable or not. "

That'll make the answer to a complaint even swifter when one is made then. Even more reason to submit one.

No mikey, you are thinking logically. Logic doesnt work with the FOS.

They will get the complaint in, it will then sit in a queue to be allocated to an adjudicator. It will get allocated after a while but that adjudicator will leave and it will go back into the queue to a be allocated again. Repeat that process several times. The adjudicator it ends up with will probably be a newbie who gives out wrong information and will then have to be corrected (be either side) and about 12 months later you finally get a decision. That decision will not reflect previous decisions due to lack of consistency.

Incyder

I would (you don't have to) but I would, let the policy run on till the end. Cancelling it means you won't gain a year of no claims bonus for next time you insure.
I know there is some bollux about not being able to have insurance running on a car you have no interest in any longer but I would, and have, ignored that (you don't have to)
That way you will save just over £22 against the cancelling charges, save a lot of hassle and paperwork and arguing with Hastings and you get a years no claims as you reach the end of the policy. Everyones a winner.

mikey72

dunstonh wrote: »

No mikey, you are thinking logically. Logic doesnt work with the FOS.

They will get the complaint in, it will then sit in a queue to be allocated to an adjudicator. It will get allocated after a while but that adjudicator will leave and it will go back into the queue to a be allocated again. Repeat that process several times. The adjudicator it ends up with will probably be a newbie who gives out wrong information and will then have to be corrected (be either side) and about 12 months later you finally get a decision. That decision will not reflect previous decisions due to lack of consistency.

So
if you don't make a complaint, you will definately not get any money back.
if you do make a complaint, you may get money back, and they'll even look at the £50 cancellation fee again?
So, you may lose the price of a stamp, you may gain ££'s