Rediculously high cancellation charges

Herbbert

Hi. I know a lot of people complain about insurance cancellation charges but I think this takes the biscuit.

I recently cancelled my insurance on a road legal quad bike after 42 days of the second year of the policy. The policy was with a company called Bikesure who are an insurance broker. The insurer was Equity Red Star.

I paid £288.02 for a years cover and was expecting a decent refund after the usual insurance cancellation fee. They have sent me £85.12!

I have complained and received the following calculations explained by them:

£30 policy setup fee retained by broker, £25 cancellation fee charged by broker, £15 personal accident cover non-refundable, £20 cancellation fee by insurer, 62.5% refund using the insurers short-period rates, 20% of refund retained by broker for commission.

Can they get away with this?

scheming_gypsy

Sounds like it as you've got two contracts and have two lots of charges and each one will be within the limit.

mikey72

Maybe it is right, but it sounds high.

Make a written complaint, mention

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

and refer the complaint to the FOS if they don't agree to refund more.

dunstonh

£30 policy setup fee retained by broker, £25 cancellation fee charged by broker, £15 personal accident cover non-refundable, £20 cancellation fee by insurer, 62.5% refund using the insurers short-period rates, 20% of refund retained by broker for commission.

Most of those seem fair enough. A couple seems excessive (i.e. keeping 20% of the commission but having a fee as well. You would expect one or the other. not both)

Motorbike insurance suffers a problem that many people take it out just for the summer. So, short term rates get applied to those using annual insurance but cancel not too long afterwards. So, you cannot compare with car insurance.

Make your complaint to the firm but be aware that they dont appear to be doing much wrong with those charges and it will probably be a goodwill adjustment if you get one.