BISL Cancellation charges

ROSSTEPHENS

I recently cancelled my van insurance BISL (Budget Insurance) because my van had broken down irreparably. BISL were unable to transfer the policy to my new vehicle, but quoted me a premium for a new full 12-month contract, which I declined because it was £50 more than a similar policy with another reputable insurer. They then informed me that I owed them a cancellation fee of £75. I could have accepted this fee had I cancelled the policy for no good reason: however faced with the unexpected expense of purchasing a new vehicle, & on the grounds that BISL were unwilling to compromise in any way, I feel this is an unfair charge, & completely disproportionate to the annual premium of around £200. Having stated that I was not happy to pay the charge I immediately received what can only be described as a threatening letter (headed "WARNING" in big bold letters) demanding payment. I shall most likely pay up so as not to blemish my untarnished credit record, but I intend to complain to the FCA & I shall most certainly not be insuring with BISL again!

dunstonh

I feel this is an unfair charge, & completely disproportionate to the annual premium of around £200.

The size of the premium has nothing to do with an fixed admin charge. Why should someone who is paying £2000 in a premium pay a higher admin charge than you? That would not be fair.

but I intend to complain to the FCA

The FCA do not handle consumer complaints. You have to complain to BISL. If you disagree with their response you can refer to the FOS. However, the FOS generally have no issues with admin/cancellation charges as long as the fee is published and reasonable. A £75 charge would not be considered unreasonable. Although it is certainly at the upper end.

rich13348

By the sounds of it. It would probably be cheaper to let your insurance run its course and lapse than cancel it.

InsideInsurance

Not only is there admin involved but there is a lot of marketing costs too. So you bought a 12 month contract and assuming you bought from Confused.com BISL probably paid in the region of £75 to them. You cancel the policy after 1 month and they still have had to pay £75.

So you have 3 options:

1) You have no cancellation fees but you charge everyone £20 a year extra to cover these costs

2) You have a long complex way of calculating the cancellation fee which will be dependent on when in the year you cancel, what channel you bought the product from/ commissions were paid etc and can have no clarity on what itll cost until you actually come to cancel it

3) The insurer works out the average cost of calculation and set a fee below that which they can advise all customers of BEFORE they buy and its only charged to those that decide to cancel

The regulators prefer option 3 as they support the idea of "pay on use" rather than hitting everyone with a cost and they prefer consumers to have clear up front costs before committing to the contract than a statement that there will be a fee but we can only tell you it once you've cancelled.


Almost all insurers and brokers charge cancellation fees and whilst I would personally probably avoid Budget under all their brands to say its because of fees will probably mean there is no one you can insurer with outside of the high net worth type providers who's premiums are massively more expensive to start with.