Cancellation fee home insurance - not signed credit agreement

moominpops

Hi all,

I moved house at the end of January and rang to cancel my home insurance, the lady on the end of the phone said I would need to pay £50 upfront straight away and only then could they cancel. I couldn't pay straight away so I was going to rang back but I didn't. I waited until my next payment came out and cancelled the direct debit (stupid of me I know but I can't afford £50 outright, I also think it's a rip off and couldn't afford it what with the costs of moving house).

They have been sending me letters now saying my running account will cancel on 25 February 2014, please be aware that cancellation of the running account may also lead to cancellation of my insurance policy or the requirement for me to pay the full outstanding balance of £99.00.

The thing is I never actually signed the credit agreement once my contract had renewed last September. They sent me an email asking me to go online and sign it, they also sent me one letter but I forgot and they haven't reminded me since. Does this affect me having to pay this fee?

I am just wondering what will happen if I just ignore the letters, or ring up and refuse to pay the fees. Shall I just pay the £50 cancellation fee if they still let me? I really don't want to pay it as my installments were only 15 a month and since I have never needed to use my contents insurance I am abit reluctant to pay seeings as they have had all that money off me and for nothing but I will find a way to afford it if it means debt collectors etc, as I have never been in this situation before.

Thanks in advance.

Wammer

Cancelling the direct debit doesn't cancel the policy, it only cancels the payment.

I would pay up PDQ. If the insurance company cancels your policy due to non-payment you will have to declare that you have had a policy cancelled to every insurer forever more and you will then find out how expensive insurance can be.

moominpops

Thanks Wammer, I am clueless on these things as I have never had to deal with it before. I will ring and pay the cancellation fee. Thank you for replying.

jonesMUFCforever

Could you not have transferred your policy to where you are living now?

[Deleted User]

Don't pay the cancellation fee. Challenge it. Ask them to send you a copy of the contract where you agreed to pay it in the event of cancellation. They obviously don't have it. See what they say.

moominpops

JonesMUFCforever - when we bought the house we are in now our mortgage advisor sorted all contents and buildings insurance out for us. Knowing what I know now I probably would have transferred it until renewal and then swapped.

[DELETED USER] All I could find in the unsigned credit agreement were these two paragraphs regarding charges:

Enforcement charges B.3.3. We will also charge you all our reasonable costs, charges and expenses incurred by us enforcing our rights under the Agreement (including any legal costs arising from issuing or defending court proceedings). These are payable on demand.

Administration charges B.3.4. You must pay our reasonable fees and charges to cover the reasonable administration costs we incur in dealing with any
queries or requests you make in connection with the Account (including any request by you to change a Monthly Payment
Date or for a copy of any document) unless we are not legally entitled to charge you such amounts. We shall tell you when you incur these fees and charges and the amounts incurred, which are payable at the same time that you make your next Monthly Payment, or if there are no Monthly Payments scheduled, on demand.

I guess these vaguely describe the charges they will enforce if I cancel the contents insurance - I just didn't think it would be £50 plus. I was just wondering by the sentence "unless we are not legally entitled to charge you such amount" if that included not having signed the actual agreement or whether it doesn't matter if the agreement got signed or not?

keith1950

Pay the cancellation fee and then put in a complaint if you feel that strongly about it.

If you don't pay and they continue to chase you for it then eventually it could lead to your credit being ruined.

I would have thought that by continuing the insurance after renewal and keeping up the direct debits it could be considered that you were accepting the renewal.

Buzby

The fact you signed nothing is immaterial. By giving them a DD and paying for the service it is established you gave these details voluntarily and made ongoing payments, this is as good as signing should it come to court.

Cancellation fees are pretty standard - they will not be in your contract, but the firm's standard terms of service (price list) and these can usually be found on their website.

You will have already agreed to these at the inception of the policy, so challenging now will be futile UNLESS they have plucked this figure out of thin air. Check their fees to confirm either way.

*Scarlett

You should be able to avoid paying the outstanding balance if you have proof of dual insurance (ie someone else was covering you during this period). They may send a form for you to complete and return.

However you will be liable for the cancellation fee. FOS has stated that £50 is acceptable. This fee will have been in your policy docs and you would have accepted it when you renewed,

The only other thing I can think of is maybe a complaint about the mortgage advisor who sold you the current insurance - they should have told you that you may have a fee to cancel the current policy (I imagine they do get a commission for signing someone up to insurance).

Either way you need to pay the £50 and I'm sure you will be more cautious about these things in the future.