Home insurance

Bigspark

I'm halfway through my home insurance policy with the AA.I pay by direct debit.I got myself a cheaper quote from my bank saving myself 15 quid a month.I cancelled my DD with the AA.they charged me 12 quid administration fee.They sent me a letter saying my account was 108 pound in credit but i wouldn't get this back.They then told me that i had to pay 118 pound to come out of my agreement which I have now paid.
This seems a bit harsh.Why can't i have the cash credited to my account?Also why can they charge me so much for cancelling?The money i would have saved changing to my banks policy has now been eaten up.It's more trouble than It's worth.
The bank pushed me into changing.They all want our money but don't care about us once they've got it.

The_AA_Company_Representative

Hello Bigspark, this is something that we would like to address with you. Please email the details to chat@theaa.com including your policy number, full name, address and title your email Reference FOR41836. Regards, The AA

Gulp

This has just happened to me, I took out a policy with The AA for Buildings and Contents Insurance in January 2013, and were paying by direct debit. We are about to move house and I knew the policy would not suit the new house we have bought so I did a search to find a new company. I took out the new policy with L&G. I have just got off the phone to the AA advising I wish to cancel their Insurance, and have been told I have to pay £78.39 to cancel the policy. My original quote was for only some £120.00.
A warning to other would be AA Insurance Customers DONT DO IT.

Quentin

Usually when you cancel any policy just cancelling invokes a separate cancellation charge (around £50 with AA).

The aa just act as brokers, so their arrangement fees won't be refunded.

If you made a claim during the year the whole premium is due.

If no claim has been made then they should refund some of the unused premium if already paid in full (pro rata).

if you are paying by instalments, then there may be early termination fees to pay when you cancel on top of the other charges.

Next time you decide to cancel mid term find out the full cost of cancelling before making the decision, and don't just cancel the dd - that just cancels the method of payment, and invokes charges when the company's request for the premium gets rejected by your bank as you have found out.

sithemadmonkey

AA policies paid by instalments typically run in arrears, as the first direct debit payment isn't usually taken until 2 months after the policy has started. This means that, if you want to cancel, you've got about a month's worth of insurance to pay on top of the cancellation fee (which, as mentioned, is £50).

Just to complicate matters, the automated letter sent out by the AA upon cancellation is very confusing, as it talks about a 'credit of £xx to your account', which most normal people would take to mean money due back to them. It's actually talking about the remainder of the year's insurance premium being refunded to their loan account used to pay for the premium upon inception - the AA doesn't do themselves any favours in using this wording, as evidenced by OP's confusion.

I used to work for AA insurance, in the department that deals with people's instalments, and at least 50% of your day is spent explaining both the 'payment in arrears' method, and the 'credit to your account' wording to confused ex-policyholders. If it's any consolation, we didn't like it any more than you do!

The_AA_Company_Representative

Gulp wrote: »

This has just happened to me, I took out a policy with The AA for Buildings and Contents Insurance in January 2013, and were paying by direct debit. We are about to move house and I knew the policy would not suit the new house we have bought so I did a search to find a new company. I took out the new policy with L&G. I have just got off the phone to the AA advising I wish to cancel their Insurance, and have been told I have to pay £78.39 to cancel the policy. My original quote was for only some £120.00.
A warning to other would be AA Insurance Customers DONT DO IT.

Hello Gulp, so we can try to help, please email the details to chat@theaa.com including your full name, address and policy number with Reference FOR43953. We look forward to hearing from you, Kind Regards, The AA