Please Help re Home Insurance

Diz2014

Hi,

This is my first post here.


Have just taken out Home Contents and Building insurance after using a Comparison Site, previously we had insurance through our mortgage provider which has now got really expensive.


After searching online we found a quote with Policy Expert and decided to take it because it was £300 less than our latest quote (came to about £155). We decided to pay through instalments, which I am now beginning to regret.


We received a letter from Close Premium Finance who are dealing with the Direct Debits, the thing I don't understand is that on the credit agreement letter it states


"that the total amount we must pay in respect of the first drawing of £121.60 under this agreement is £138.32 assuming you make all minimum payments on time" (which makes sense to us)


The bit we don't understand is that it states below that:


"The APR under this agreement is 33.41% based on the assumptions that (1) you will make a single drawing which is assumed to be £1,200" ........


Ending - "Based on these assumptions the total you will have to repay us under this agreement would be £1,398"


Can someone please explain this? If we just pay the 11 direct debits of 12.57 will that be the last we hear of it? What happens to the £1000 extra mentioned on the credit agreement?


It also states on the pre-contract information:


" The duration of the credit agreement - The Agreement has no fixed on minimum duration"


?? I thought we would have payed it off after 11 months and that would be the end of it?


Sorry to ramble, hope this makes sense- it is really stressing me out. I'm tempted to cancel the insurance policy and start all over again but pay it in 1 instalment instead.


Thanks for any advice..

jonesMUFCforever

Basically they are charging you £17 extra because you want to pay monthly - there will be no other charges as long as you pay each instalment on time.
The agreement has no fixed duration means they will continue to debit your account if you hold on to the policy for more than 12 months.

Diz2014

Thank you so much for replying, that was the part I did not understand - I thought that we would pay off the balance over the year, and still have an indefinite debt from the £1,398 "assumption".


So, at the end of the year when the balance is payed off, there is no commitment to carry on financing through Close Premium? We can just walk away?


We will be paying next years in one instalment for sure!


Thanks again.. feel more confident in sending the paperwork off now.

jonesMUFCforever

Yes once you have paid for the year you can walk away - just remember to follow the cancellation procedure.