Insurance broker threatening to cancel over their mistake

mikehiow

I have an insurance policy through a broker.

Although not entirely relevant to this issue, I had two direct debits bounce earlier this year at which point it was agreed I would pay the outstanding amount in three instalments of ~£140.

Last week I phoned to change the car on the policy. I asked them to make it effective from a set time that evening, and once that was all agreed they told me how much extra it was going to be (£157) and how I would like to pay. I asked if I could put it with my next and final instalment - I was told that was absolutely fine and my insurance certificate would be in the post.

A few hours later I call back to ask if we can change the time to earlier, the person on the phone hesitates for a moment and asks if she can call me back.

Ten minutes later I receive a call from the branch manager demanding that I pay the additional premium of £157 immediately. I told him I couldn't pay it right now as I was with the vendor, it was left that we would sort it another time as I was busy and they were nearing close.

I have missed a call from them, which I must be honest I haven't returned because I simply do not have that money right now, but the insurance certificate did show up.

Today, approximately a week later I've received a letter giving me 7 days notice of cancelling my insurance policy because I have not paid the outstanding £157.

Surely once their agent has agreed to the terms of paying the additional premium with my next instalment, they cannot simply go back on that and threaten to cancel my policy with 8 months still remaining on it, which up until the change of vehicle was 75% paid for?

I'm not sure how to progress with this - do I have any rights here? Anything that might help them change their minds or is it simply a case of coming to a compromise (if they are at all willing).

Buzby

I can see why. The amendment up is effectively changing the original terms, so the increase should be paid as it is requested, but not affect the original instalment plan.

Indeed, the price quoted would be the cash price of the change, not for any extended repayment period. It might be better to source the money somewhere, as the alternative will bring other problems.

mikehiow

I see what you are saying, and had they insisted on the additional premium at the time I'd have likely paid it rather than booking the car in for a valet.

My concern is, I simply asked if it was OK to lump the additional premium with the final instalment because that was more convenient and was told it was OK and done.

Perhaps I am partly to blame for stretching to purchase the car, but it was a stretch that was only supposed to last for just over a week until I was paid.

dacouch

When can you afford to pay them?

Is it a high street broker eg close to you or is it a broker you deal with over the phone?

Alter_ego

Get in touch with them quickly, grovel and apologise. If you don't you will always have to declare that you have had insurance cancelled. This is serious stuff!

Edit they are not "Threatening" If you have received notice they are "cancelling"

mikehiow

dacouch wrote: »

When can you afford to pay them?

Is it a high street broker eg close to you or is it a broker you deal with over the phone?

It is a High Street broker.

Friday, hopefully. I am expecting to be paid then, but it doesn't always run like clockwork when you're self-employed!

I realise the best course of action will likely be to swallow my pride and cough up, which I will do if I can. My concern is that I'm not paid on time and I end up with no transport because they misinformed me over the phone.

dacouch

mikehiow wrote: »

It is a High Street broker.

Friday, hopefully. I am expecting to be paid then, but it doesn't always run like clockwork when you're self-employed!

I realise the best course of action will likely be to swallow my pride and cough up, which I will do if I can. My concern is that I'm not paid on time and I end up with no transport because they misinformed me over the phone.

They will cancel the policy unless you act.

What I would recommend you do is too pop into their office with a cheque post dated for this friday or monday. If they have a post dated cheque in their hand their is a very good chance they will not cancel the policy.

High street brokers used (Some still do) to offer instalments over the first few months using post dated cheques.

Be polite when you pop in and it should be sorted out

Buzby

It's not Swinton by any chance? The staff member probably assumed it was a reasonable request and was overruled. Incompetence is allowed for, but I think it better to move your business elsewhere!

dacouch

Buzby wrote: »

It's not Swinton by any chance? The staff member probably assumed it was a reasonable request and was overruled. Incompetence is allowed for, but I think it better to move your business elsewhere!

If it is Swinton (Nasty company) they will deduct any cash back / additional discounts from the cancellation refund which can amount to a substantial amount

shaun_from_Africa

dacouch wrote: »

What I would recommend you do is too pop into their office with a cheque post dated for this friday or monday. If they have a post dated cheque in their hand their is a very good chance they will not cancel the policy.

There is nothing to stop the broker from presenting the post dated cheque for payment before the date shown on it, and if they do this, there is a very good possibility that it will be paid by the issuing bank.
This could then lead to the op going overdrawn or if the cheque is bounced, will probably end up with the immediate cancellation of their policy.

dacouch

shaun_from_Africa wrote: »

There is nothing to stop the broker from presenting the post dated cheque for payment before the date shown on it, and if they do this, there is a very good possibility that it will be paid by the issuing bank.
This could then lead to the op going overdrawn or if the cheque is bounced, will probably end up with the immediate cancellation of their policy.

As I mentioned in my earlier post, most brokers used to use post dated cheques as a way of offering instalments. Many also use post dated cheques to accept payment for an additional premium such as in the OP's situation.

The company I work for do both of the above.

If the broker is a normal high street broker, there's a very good chance they will accept a post dated cheque as they know there's a very good chance they will get there money. Especially as they will have a monthly account with the Insurer so won't have to pay the Insurer until a week or so or more likely the first week in November

As broker's frequently accept post dated cheques, they normally have a system in place to ensure they are only banked on or after the date on the cheque. Our company has made a very tiny amount of mistakes on representing PDC in more than fifty years and on each occassion we've refunded any bank charges etc.

You are correct in that a bank will pay a cheque even if it's post dated but failing him borrowing the money from a friend a post dated cheque (If he actually has a cheque book) could solve the problem he has