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Home Insurance Cancellation Fee During Cooling off Period?
chrisfg
Posts: 1 Newbie
Can anybody confirm whether or not insurance companies are allowed to charge a cancellation fee during a 14 day cooling off period?
0
Comments
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yes they are.
They are allowed to charge for time on cover and a reasonable admin charge (which is typically upto £50 but more commonly around the £25 mark).
It is a myth that the cancellation period is free.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
They are allowed to charge for time on cover and a reasonable admin charge (which is typically upto £50 but more commonly around the £25 mark).
It is normally a cancellation charge rather than admin fee as it covers not only the cost of cancellation but costs of set up including things like marketing costs. At least this was the justification of fees that was put forward by a former client to the FSA and accepted several years ago.
A cooling off period gives you a right, statutory in this case, to cancel. If there was no cooling off then there may be no right to cancel at all, such as with most breakdown insurance and PMI0 -
Short answer (as per above) is yes, they are allowed to charge. That said, they are required to state the amounts / terms clearly.
Your policy documentation will (should) include details of the charges for cancelling within the cooling off period.0
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