Car Insurance Cancellation (cooling off period)

thebeesnees

Hi

Just tried to cancel my car insurance policy (before the 14 day cooling off period) and was shocked by the "penalty" charges. :mad:

In summary, got a quote (Laguna) and paid first instalment for policy due to start 19/04/13. We bought new car last week (Multipla) and my wife asked to transfer policy to new vehicle. This increased premium by another £150 which she was told was due to higher insurance group? (17E to 19D).

After my moaning about excessive price increase she tried cancelling policy only to be told that we would have to pay an additional £55.35 on top of the £37.15 already paid! So £92.50 in total for a policy that hasn't even started!!

£12.50 Call centre arrangement fee
£20.00 Arrangement fee
£35.00 Transfer fee
£25.00 Admin fee
£92.50

No doubt I will probably just have to pay up and deal with it. Would love to know what purpose the 14 day "cooling off" period serves!! Any advice would be appreciated

forgotmyname

Its not the best use of the 14 day cooling off.

The issue is some people assume its a 14 days free insurance offer.

Which it isnt. Its one of those things most if us dont think about. What if i need to cancel soon after taking out the policy.

Very few people probably read the terms. The only thing i know about mine is they charge £15 admin fee. Rest of the charges i dont have a clue.

InsideInsurance

thebeesnees wrote: »

No doubt I will probably just have to pay up and deal with it. Would love to know what purpose the 14 day "cooling off" period serves!! Any advice would be appreciated

It allows you to cancel it. In theory at least there is no statutory right to cancel after the cooling off period. In practice insurers do allow you to cancel the main policy (but often with less than a pro-rata refund) but optional extras like Breakdown, Legal Expenses etc receive no refund after the cooling off period.

thebeesnees

The issue, in this instance, has nothing to do with "free insurance" as the policy hadn't even commenced.

The real issue here is transparency and fairness of the charges. I was told all charges are clearly listed in the policy booklet...which is issued after first payment...great.

Two arrangement fees?? £35 to change a registration number and a £25 admin fee for what exactly?? The majority of the process is automated, no postage/printing (electronic documents) and the cover hadn't even commenced! Does that sound "reasonable"?

On a positive note, I am now far less naive regarding the acceptable business practices of insurance companies and also now know to avoid Hastings Insurance.

InsideInsurance

thebeesnees wrote: »

Two arrangement fees?? £35 to change a registration number and a £25 admin fee for what exactly?? The majority of the process is automated, no postage/printing (electronic documents) and the cover hadn't even commenced! Does that sound "reasonable"?

Ultimately if you think their fees are excessive then enter a complaint. The FOS does support cancellation fees but evidently this does have to be relative to the costs.

dunstonh

Two arrangement fees?? £35 to change a registration number and a £25 admin fee for what exactly?? The majority of the process is automated, no postage/printing (electronic documents) and the cover hadn't even commenced! Does that sound "reasonable"?

£25 as an admin fee is typical. There has to be an element of cross subsidy to keep the charges consistent. They may have one individual that creates an admin task that takes 3 minutes but another that takes 30 minutes. Both will be charged the same.

A fee for changing registration is reasonable as well. Although, why it isnt the same as the admin charge, I cant say.

As for efficiencies created by paying for computer systems and better IT, that can result in lower charges but the outlay and maintenance and upgrades have to be paid for. As does the electricity and staff that type the info in, the actuaries that work out stats, the compliance officers that monitor things and the regulator, FOS, FSCS, MAS that all take their cut off what is earned (those are not flat fees but based on income).

We have to remember that you have created multiple admin tasks. So, some of that fee is due to transfer and some is due to request to cancel. two sets of admin.

Hastings_Direct_company_representative

thebeesnees wrote: »

Hi

Just tried to cancel my car insurance policy (before the 14 day cooling off period) and was shocked by the "penalty" charges. :mad:

In summary, got a quote (Laguna) and paid first instalment for policy due to start 19/04/13. We bought new car last week (Multipla) and my wife asked to transfer policy to new vehicle. This increased premium by another £150 which she was told was due to higher insurance group? (17E to 19D).

After my moaning about excessive price increase she tried cancelling policy only to be told that we would have to pay an additional £55.35 on top of the £37.15 already paid! So £92.50 in total for a policy that hasn't even started!!

£12.50 Call centre arrangement fee
£20.00 Arrangement fee
£35.00 Transfer fee
£25.00 Admin fee
£92.50

No doubt I will probably just have to pay up and deal with it. Would love to know what purpose the 14 day "cooling off" period serves!! Any advice would be appreciated

Hi thebeesnees,

Thanks for posting, I am sorry to hear about this. I would like to help you get this matter resolved. Can you please contact me directly with your policy details so that I can take a look into this for you? [EMAIL="help@hastingsdirect.com"]help@hastingsdirect.com[/EMAIL]

Many Thanks,
Jamie