Motorcycle Insurance cancelation charge

dunstonh

weejonnie wrote: »

An interesting way to disagree with me - you say that they overcharge which surely is just to get as much out of the punter as they can. I agree that this is a result of them cutting prices and cover to the bone and I assume you have as jaundiced a few as I have about the 'race to the bottom' on comparative websites, but in any case it is hardly TCF as they would have great difficulty justifying said expenses.

Perhaps the disagreement is more on the level of cynicism to the charging. I can see why they charge more in explicit charges in multiple areas as it allows them the lower the premium and move higher up the comparison site. I am not sure it is greed.

The FSA like explicit charging. Whole parts of the industry are being forced to move to explicit charging and many feel that insurance could be forced to follow suit sooner or later. So, I doubt it would be a breach of TCF as long as disclosure is up to scratch and the fees were within an acceptable tolerance of what they feel they ought to be.

The race to the bottom is undesirable but seems unstoppable. Consumers want cheap headline figures and seem to lack the ability to understand what they are buying (generalisation alert!). However, when they want the sort of servicing that requires greater charges, the complain they are not getting it. There are some niche providers dealing with the quality market but the fact they are in a minority tells you exactly what the consumer wants. Or rather what the consumer is getting because the comparison sites tell them that is what they want.

falklandhill78

Having now read all the small print in the policy (which was e-mailed as an attachment when the insurance was taken out), I see that I am due to pay 70% of the premium for 5 months cover plus a cancelation charge. Still feels unfair that they wanted more for half a year than they did for a full year.

However - received a letter today confirming cancelation and asking for return of certificate with no mention of any payment being required. Hopefully that is the end of it.

dunstonh

I see that I am due to pay 70% of the premium for 5 months cover plus a cancelation charge. Still feels unfair that they wanted more for half a year than they did for a full year.

That is one of the negatives of explicit charging and small premiums. The charge is the same whether it is a £50 premium or a £5000 premium as the work is the same. Those with small premiums lose out whilst those with large premiums gain.

weejonnie

dunstonh wrote: »

Perhaps the disagreement is more on the level of cynicism to the charging. I can see why they charge more in explicit charges in multiple areas as it allows them the lower the premium and move higher up the comparison site. I am not sure it is greed.

The FSA like explicit charging. Whole parts of the industry are being forced to move to explicit charging and many feel that insurance could be forced to follow suit sooner or later. So, I doubt it would be a breach of TCF as long as disclosure is up to scratch and the fees were within an acceptable tolerance of what they feel they ought to be.

The race to the bottom is undesirable but seems unstoppable. Consumers want cheap headline figures and seem to lack the ability to understand what they are buying (generalisation alert!). However, when they want the sort of servicing that requires greater charges, the complain they are not getting it. There are some niche providers dealing with the quality market but the fact they are in a minority tells you exactly what the consumer wants. Or rather what the consumer is getting because the comparison sites tell them that is what they want.

So what do you think will happen in the future for insurance if it goes fee orientated? Customers who go to Swintons will be charged a fee - to arrange the policy - presumably quite a hefty one - they will also be charged a fee online for arranging a policy - it will be quite a shock to them initially seeing a £50 fee for arranging a policy when there has been a lot of screaming about £5.00 credit card fees etc.

One thing - it will stop commission rebating!

dunstonh

So what do you think will happen in the future for insurance if it goes fee orientated? Customers who go to Swintons will be charged a fee - to arrange the policy - presumably quite a hefty one - they will also be charged a fee online for arranging a policy - it will be quite a shock to them initially seeing a £50 fee for arranging a policy when there has been a lot of screaming about £5.00 credit card fees etc.

One thing - it will stop commission rebating!

If it goes the whole hog like the other areas then there wont be commission. I suspect they will monitor the retail distribution review and see what consumer reaction will be. It is already recognised that small value transactions are likely to be more expensive under that compared to large value ones.

vaio

falklandhill78 wrote: »

Having now read all the small print in the policy (which was e-mailed as an attachment when the insurance was taken out), I see that I am due to pay 70% of the premium for 5 months cover plus a cancelation charge. Still feels unfair that they wanted more for half a year than they did for a full year..........

So for £70 they can set the policy up, cover you for a year and then end the policy but they want £80 to set the policy up, cover you for 5 months and then end the policy.

I'd be interested in how they explain that given the general FOS principle that refunds should be pro rata for time on cover.