cancellation fee in cooling off period

mikey72

JuicyJesus wrote: »

...and the banks won.

So no complaints if we do the same with insurers then. They'll win, you'll be sorted.

Quentin

InsideInsurance wrote: »

Presumably the same unfair contract clause that banks got stung over about overdraft fees when the OFT investigated it

How were the banks stung, and who said they were unfair? - The investigation was dropped when they lost their test case, and the banks continue to charge o/d fees.

(And where is there a connection between banks' o/d fees and car insurance cancellation fees in excess of £50 anyway?)

squashynose

Thanks for clearing that up
I know it's only a couple of quid, but still, it's the principle. He wasn't made aware of a cancellation fee when he took out the policy. He's gonna call them tomorrow, and if they still insist, he'll ask for them to listen to the recorded phone call... If they didn't record it, then that's their problem. At no point was he made aware of this fee, and I think that's very sneaky.

Spiderham

Quentin wrote: »

How were the banks stung, and who said they were unfair? - The investigation was dropped when they lost their test case, and the banks continue to charge o/d fees.

(And where is there a connection between banks' o/d fees and car insurance cancellation fees in excess of £50 anyway?)

I'm guessing the comment was somewhat tongue in cheek and the fact the banks weren't stung is the point.

A lot of people make a big fuss about admin fees and I honestly think if it was pushed hard they really would not like the outcome. I'm sure insurers would be able to provide evidence to justify a much higher admin fee than already charged if pushed, increasing the rates for all to whatever maximum is set.

As a quick back of the envelope calculation, the UK (private car) motor insurance market is about £10,000,000,000 and a market estimation for expenses ratios I have seen is about 28%. This means £2,800,000,000 in non-claims costs. There are (if I recall correctly) about 27,000,000 cars on the road so that makes it about £100 per policy in expenses so £100 admin fee seems fair. Plus that's just insurer costs and ignores what it costs brokers if they are involved in the process so maybe a little more is fair.

mikey72

Spiderham wrote: »

I'm guessing the comment was somewhat tongue in cheek and the fact the banks weren't stung is the point.

A lot of people make a big fuss about admin fees and I honestly think if it was pushed hard they really would not like the outcome. I'm sure insurers would be able to provide evidence to justify a much higher admin fee than already charged if pushed, increasing the rates for all to whatever maximum is set.

As a quick back of the envelope calculation, the UK (private car) motor insurance market is about £10,000,000,000 and a market estimation for expenses ratios I have seen is about 28%. This means £2,800,000,000 in non-claims costs. There are (if I recall correctly) about 27,000,000 cars on the road so that makes it about £100 per policy in expenses so £100 admin fee seems fair. Plus that's just insurer costs and ignores what it costs brokers if they are involved in the process so maybe a little more is fair.

It would indeed be interesting to see it justified. I have two brokered policies that didn't cost that much initially, so they're losing money writing it up. Two other main policies ae less then £200 , and have no fees to ammend. Ammended one once, £1 premium change, and ammended the other twice. So both out of any profit now. I wonder if the 28% is real, or another creative accouting exercise?

squashynose

Another question... If the insurance company physically can't insure the new vehicle, can't swap the current policy to the new vehicle, would a cancellation fee still be chargeable?

We had an issue with van insurance a few months ago, where the company cancelled the insurance because they would not give us enough time to get the driving license back from dvla with change of address (we'd just moved), so they cancelled the policy. They tried to charge £50 cancellation, then £80 the next day, then a random £54 and a few pence. I sent them a snotty email after being hung up on 3 or 4 times, and they never replied, but also stopped chasing for the money...

Quentin

squashynose wrote: »

Another question... If the insurance company physically can't insure the new vehicle, can't swap the current policy to the new vehicle, would a cancellation fee still be chargeable....

It would be you "changing the gateposts", so they could charge a cancellation fee if the policy conditions allow one.

mikey72

squashynose wrote: »

Another question... If the insurance company physically can't insure the new vehicle, can't swap the current policy to the new vehicle, would a cancellation fee still be chargeable?.......

Normally if they can't offer the insurance, and decline to quote, as it's they who don't wish to have you as a customer, the fee isn't chargable, and it should be a pro rata refund. They may try to push it, but if they do, escalate the complaint.