Direct Line Cancellation Fee?

punkpink

Hi i was looking for a bit of advice for my OH if possible;

He had an insurance policy (paid in monthly installments) with direct line as a named driver on his dads policy (think it was renewed in April). He got rid of that car and has purchased a new (well second hand) car so got his dad to cancel his direct line policy because he wants his own one.

He set up a new policy, again with direct line, but this time as the only driver (because he gets the no claims built up as a named driver with them) BEFORE his dad cancelled his policy with them and asking for proof of no claims.

However, now direct line are asking for a payment of £55.00 as a cancellation fee, even though my OH is in fact still a customer with them and has a new 12 month policy with them.

Can they do this? I could understand if he was leaving them because they would lose out, but he is in fact paying more now and will be with them longer! :mad:

I was going to email them to ask what the cancellation charge covered and point out the fact he was still a customer with them but they appear not to have an email address.

TIA

visidigi

I beleive there is a clear ammendment charge to change a policy - did you OH pay in full or in monthly repayments? I'm sure £26.50 or something rings a bell...

punkpink

visidigi wrote: »

I beleive there is a clear ammendment charge to change a policy - did you OH pay in full or in monthly repayments? I'm sure £26.50 or something rings a bell...

he paid monthly and it was all up to date.

cajef

punkpink wrote: »

However, now direct line are asking for a payment of £55.00 as a cancellation fee, even though my OH is in fact still a customer with them and has a new 12 month policy with them.

The first policy was his Dads (which sounds very much like fronting anyway) which has been cancelled, check the T & C for the cancellation terms.

The second is his, two completely different policies, he may have been a named driver but he was not a customer of theirs his Dad was, he is in effect a new customer as he has just started a new policy in his name with them.

unholyangel

Has his dad cancelled his policy?

I did the exact same with the same company! Was a named driver on my dads policy. For work purposes i needed my own insurance so took my name off my dads and set up my own - was hardly any difference in price as i had 3 years as a named driver.

They didnt charge us a fee though.

Always do shop around for car insurance though. 2 years later my insurance increased by 40-50% - even though it was supposed to decrease (as i'd turned 25) by around 25%. Went online and compared policies, found my current insurer who have been cheapest 3 years running and have better coverage and a lower excess than direct line. The price with my new insurer was actually cheaper than my insurance was expected to be (with the 25% reduction for over 25) with direct line........quite funny considering i had 5 years NCB with DL but only 2 could be carried to other insurers.

I did actually ask Direct Line about the increase. Their response was all insurers are increasing their prices by 20%. I pointed out it was a much higher increase in my case - especially once you factor in that i was supposed to have a 25% reduction.

punkpink

unholyangel wrote: »

Has his dad cancelled his policy?

I did the exact same with the same company! Was a named driver on my dads policy. For work purposes i needed my own insurance so took my name off my dads and set up my own - was hardly any difference in price as i had 3 years as a named driver.

They didnt charge us a fee though.

Always do shop around for car insurance though. 2 years later my insurance increased by 40-50% - even though it was supposed to decrease (as i'd turned 25) by around 25%. Went online and compared policies, found my current insurer who have been cheapest 3 years running and have better coverage and a lower excess than direct line. The price with my new insurer was actually cheaper than my insurance was expected to be (with the 25% reduction for over 25) with direct line........quite funny considering i had 5 years NCB with DL but only 2 could be carried to other insurers.

I did actually ask Direct Line about the increase. Their response was all insurers are increasing their prices by 20%. I pointed out it was a much higher increase in my case - especially once you factor in that i was supposed to have a 25% reduction.

Yes he has cancelled his policy, and they now say we have 10days to pay them £54.40. But i do not understand how a cancellation fee can be so high regardless of the fact he has taken a policy out with them.

And his dad did share his car, they both used it. But now he has his own car he got his own insurance.

unholyangel

punkpink wrote: »

Yes he has cancelled his policy, and they now say we have 10days to pay them £54.40. But i do not understand how a cancellation fee can be so high regardless of the fact he has taken a policy out with them.

And his dad did share his car, they both used it. But now he has his own car he got his own insurance.

And his dad didnt need the insurance for the other car?

Thats the difference between my own situation. My dad kept on his policy with them. Perhaps thats why they didnt charge? Then again it was a few (3 now) years ago so possible they've changed their terms and conditions by now.

Does your OH's dad still have his policy documents? He should read through them about cancellation conditions. Just checked their online version. It states this:
Any change during the period of insurance may result in an additional or
return premium and will be subject to an administration fee. See general
condition 4 for further details.

And part of condition 4:
• If you cancel after those 14 days have passed, we will return any premium
paid less:
• a charge for the number of days for which cover has been given; and
• an administration fee as shown in your schedule

It also has this:
How to complain
If you need to complain, please call us on 0845 246 8811.

If we cannot sort out the differences between you and us, you can take
the matter to the Financial Ombudsman Service (FOS). It is an independent
organisation that operates according to the rules made by the Financial
Services Authority.
Their address is: Financial Ombudsman Service, South Quay Plaza,
183 Marsh Wall, London E14 9SR. Phone: 0845 080 1800. You can visit
the FOS website at https://www.fos.org.uk

cajef

punkpink wrote: »

Yes he has cancelled his policy, and they now say we have 10days to pay them £54.40. But i do not understand how a cancellation fee can be so high regardless of the fact he has taken a policy out with them.

When you take out insurance it is an annual policy, you have the choice of paying the full amount in one payment or paying by monthly instalments, your monthly payments may have been paid up to date but the remainder of the premium was due up till April (four months), as it was cancelled before the full amount was paid, a cancellation fee has been charged.