Home insurance miscalculated, plus cancellation fee

squirreltz

Hi,
We took out b+c ins via AA last Apr for our flat, moved to a rented house 29/01/13, cancelled dd and telephoned them to cancel policy.
I would have transferred, but I childmind out of the house we moved into, owned by my parents, and their policy doesn't cover damage by mindees.

After much confusion, we finally established that they set up our direct debit 2 months after the start of my policy, for the original monthly quote. Put simply, we paid April up front, they started the dd from June, we paid every month up till Jan then cancelled the dd. They call that 2 months behind, I presume May plus Apr if the up front payment is considered the interest.

They say after first 14 days you don't get refund on optional accidental damage and legal exenses - fine, no arguement with that. The rest should be pro-rata'd for the cover I had. By the time they add a cancellation fee, which turns out to be exactly what they owe me for last two months, and demand two months payment; would be cheaper to let the policy run to March even though I don't need it.

However, it must be that when March came and I didn't renew, they'd have demanded the two months payment then? Had we not dared to move house mid-policy, the first I'd have heard of this would have been then.

Something similar happened with our car ins when Hubby didn't recognise the obscure name of the dd provider and cancelled it after the first dd had gone out, I didn't realise till they rang me just over a month later to say the next month was returned rtp. As it would be the following month before the dd became active, they were happy just to recalculate the remaining payments over the term so it would still be fully paid at the end. Cost me about an extra £10 each month, quite happy, even got a new breakdown in the post. Surely AA should have done the same as soon as we fell behind? And they must have known, as one payment bounced and they reclaimed it plus a cheeky £12 admin fee (for an automated process no one else charges for!) and I rang them to find out why, so they would have looked into it then but told me we were up-to-date.

I believe it's AA's fault if we are two months behind, especially as we are cancelling 2 months early. Has anyone ever had a simlar situation they fought with an insurer?

My other thought was that when you hear of people getting stopped for having no insurance because they let it lapse, did the companies just not bother fighting for cancellation fees and outstanding add-ons? If not, perhaps I'm better off just letting it lapse, since our tenants have contents, we have a landlords buildings policy and I am genuinely not 'driving' the flat anywhere? Or do we just not hear that part amongst the tickets and car crushing noises...

Any ideas anyone? I'm happy with paying a fee, as long as they've had the same premiums as months covered plus interest, but surely its their fault we're running two months in arrears?

McKneff

I really cant see why you are comparing car insurance with house insurance, it is a completely different scenario.

Car insurance is legally enforceable and house insurance is not.

Your post is very difficult to read because of this.



If you cancelled your house insurance they could just as easily slapped you with a £50 cancellation fee and an admin fee to boot.

squirreltz

McKneff wrote: »

I really cant see why you are comparing car insurance with house insurance, it is a completely different scenario.
Car insurance is legally enforceable and house insurance is not.
Your post is very difficult to read because of this.

Apologies, I figured the way a car insurance company would deal with direct debit payments would be the same. Now we are with the same insurer for home, car and pet, I will have to check this too.

McKneff wrote: »

If you cancelled your house insurance they could just as easily slapped you with a £50 cancellation fee and an admin fee to boot.

Ok. I have cancelled my home insurance, I was expecting a fee of some sort, and probably a small payment from me to them for the pro-rata for partial year. (Them to me is possible, but I won't daydream!)

My complaint is that I am ALSO being charged two months premium in addition, as the direct debit was running too far behind. I compared to car ins as I happened to have that experience, but thought it was an admin/direct debit/insurance resolution as opposed to specific to cars.

I believe AA should have either recalculated my premium once the direct debit set-up so late, or at least written to me to warn me so I could decide what to do. What sort of insurance gives you two free months cover at the beginning then charges you for it at the end after you've left them? As a result, I think they should waive those two months, and call it quits bar a reasonable cancellation fee.

I was asking if someone else had a simlar experience and how they resolved it?

The question about allowing it to lapse and ignoring them was because I'd heard of this happening and wondered if I could do the same. But if it's only done with car ins then obviously not.

Hope that's a bit clearer.

InsideInsurance

First of all, the AA is a broker not an insurer.

The fact you are paying by installments is not a case of paying for it a month at a time but simply you have loan to repay a debt. With larger companies the broker or insurer provide you that loan themselves, with smaller companies a 3rd party company provides the loan.

You mention you are two months behind on the installments, was that due to you cancelling the DD as per Motor or just them being late setting it up?

If its them being late that simply means they cannot financially penalise you for that lateness ie they cannot add additional interest or late payment fees however it doesnt mean that you dont owe the money to them. Legally they have up to 6 years to claim the debt from you and so 2 months late is well within the limits.

squirreltz

Thankyou, I knew they were a broker - although they neglected to put it in their paperwork. There's a £9 broker fee in there somewhere.
The two months behind is due to AA being late setting up the dd, had I noticed back then I would have sorted it.
I realised it was a loan with interest on top, I just presumed this one would work like the others where they calculated total of insurance, add-ons, fees and interest; took off the deposit you paid and calcuated monthly payments from the balance. Others we've had did the payments over 10 months to allow for delays like this.
I would have had a big bill to pay either way, just when you could do wthout it - more annoyed as it seems to be their doing not mine.
Nowt to be argued then?

InsideInsurance

As long as they havent charged additional interest or late payment fees then no. They've collected the same total as agreed just a little late in starting and whilst it is annoying you are not actually financially worse off (technically slightly better as you've had the money for an extra two months in theory accruing interest)

The_AA_Company_Representative

Hello Squirreltz, if there is anything you would like us to address, please email the details to [EMAIL="chat@theaa.com"]chat@theaa.com[/EMAIL] including reference FOR36782, we will be happy to look into this for you. Kind Regards, The AA