'Admin' fees & cancelling car insurance policy

Nate_J

Hi,

I've registered and come here for some advice regarding cancelling my car insurance policy and so called 'Admin' fees.

My insurer had sent me a renewal notice with the price of the premium, they then contacted me via phone to discuss it etc. At the time their renewal price was the lowest I could find so I decided to go ahead with it and pay for it in full. This was done on the 18/07/18.

Today, after some research, I've been able to find a private insurer that have quoted me nearly £100 less for a similar level of cover. So I thought great, I'll have this one and cancel the one which I paid for yesterday. Bearing in mind, my current policy lapses on the 20/07/18 so the new cover hasn't yet kicked in.

In my mind, I was within the cooling off period plus the new policy has not even started yet so cancelling it wouldn't be an issue for a full refund. I ring the insurer to make them aware and was advised that I will incur admin charges for cancelling (in excess of £50). I'm not even a new customer, so the renewal was sent to ME by THEM, so the quote they had sent to me was already done (plus a minor amendment to the details on the policy).

To me, this seems very unfair and I am pursuing it with the insurer as I type this. I would like to know would I have a leg to stand on if I continue down a complaints route to the financial ombudsman?

Any advice will be appreciated

Thanks.

forgotmyname

You took out a new policy which entailed your current insurer/broker having to do some work.

Even though the new policy has not started its still arranged and setup.

The fee is correct if thats what your terms and conditions state.

Nate_J

forgotmyname wrote: »

You took out a new policy which entailed your current insurer/broker having to do some work.

Even though the new policy has not started its still arranged and setup.

The fee is correct if thats what your terms and conditions state.

Thanks for the reply,

Clicking a few buttons do not account for +£50 admin fee charges, that seems unreasonable, surely?

As it was a renewal, not as if they had to start a quote from scratch.

I've learned this the hard way, that's for sure!

[Deleted User]

Nate_J wrote: »

Clicking a few buttons do not account for +£50 admin fee charges, that seems unreasonable, surely?

Not under the current business models to give customers the lowest up front price, no.

paddyandstumpy

Nate_J wrote: »

Hi,

I've registered and come here for some advice regarding cancelling my car insurance policy and so called 'Admin' fees.

My insurer had sent me a renewal notice with the price of the premium, they then contacted me via phone to discuss it etc. At the time their renewal price was the lowest I could find so I decided to go ahead with it and pay for it in full. This was done on the 18/07/18.

Today, after some research, I've been able to find a private insurer that have quoted me nearly £100 less for a similar level of cover. So I thought great, I'll have this one and cancel the one which I paid for yesterday. Bearing in mind, my current policy lapses on the 20/07/18 so the new cover hasn't yet kicked in.

In my mind, I was within the cooling off period plus the new policy has not even started yet so cancelling it wouldn't be an issue for a full refund. I ring the insurer to make them aware and was advised that I will incur admin charges for cancelling (in excess of £50). I'm not even a new customer, so the renewal was sent to ME by THEM, so the quote they had sent to me was already done (plus a minor amendment to the details on the policy).

To me, this seems very unfair and I am pursuing it with the insurer as I type this. I would like to know would I have a leg to stand on if I continue down a complaints route to the financial ombudsman?

Any advice will be appreciated

Thanks.

Nate_J wrote: »

Thanks for the reply,

Clicking a few buttons do not account for +£50 admin fee charges, that seems unreasonable, surely?

As it was a renewal, not as if they had to start a quote from scratch.

I've learned this the hard way, that's for sure!

It's not just clicking a few buttons though. What job do you have, and can it be trivialised into that?

How do you think the insurer pays the wages for the person who called, the building they were sat in, the chair they were sat on, the desk they were sat at, the phone they called on, the phone line they used?

Physical costs aside, there is the cost of regulation and the upkeep of staying compliant (including staff training) to add to the above costs.

Quentin

paddyandstumpy wrote: »

It's not just clicking a few buttons though. What job do you have, and can it be trivialised into that?

How do you think the insurer pays the wages for the person who called, the building they were sat in, the chair they were sat on, the desk they were sat at, the phone they called on, the phone line they used?

Physical costs aside, there is the cost of regulation and the upkeep of staying compliant (including staff training) to add to the above costs.

And loo paper isn't cheap these days either

ThePants999

paddyandstumpy wrote: »

How do you think the insurer pays the wages for the person who called, the building they were sat in, the chair they were sat on, the desk they were sat at, the phone they called on, the phone line they used?

The ombudsman has made very clear that admin fees should reflect the actual costs to the business. So let's have a look.

I'm going to incredibly generously assume the desk, chair and phone cost a grand each and need replacing every five years. So that's £50 a month in furniture. Call it £50 a month for the phone line. Floor space for one desk for a month - I dunno, two hundred? Amd let's say this poor call center drone earns £12 an hour. Cancellation takes, what, five minutes? Let's be generous again and call it ten. So that's £2 in wages. Now let's say this company's phone lines are open 8-6, five days a week - about 2,500 hours a year, call it 200 a month, so that's what we'll spread the fixed costs across. Three hundred quid for two hundred hours, 10 minutes' worth... 25p. Whoa, pricey. Oh, and this is assuming they actually use a UK call center

I'm sure we've missed a bunch of stuff, but it's got to be twenty times what we've identified so far!

paddyandstumpy wrote: »

Physical costs aside, there is the cost of regulation and the upkeep of staying compliant (including staff training) to add to the above costs.

Nope, not admissible. They'd have incurred those costs regardless of this cancellation. Well, if you want to take the cost of training this staff member in the cancellation process, divide that across his or her tenure at the company, and take ten minutes' worth, you're welcome to add another few pence to our £2.25.

Quentin

ThePants999 wrote: »

The ombudsman has made very clear that admin fees should reflect the actual costs to the business. !!!8230;.

In 2005 the Ombudsman agreed a cancellation admin fee of £50 was acceptable for a complainant who had been charged that when cancelling an annual policy (house insurance)


How much was a pint of beer in 2005??

Nate_J

paddyandstumpy wrote: »

It's not just clicking a few buttons though. What job do you have, and can it be trivialised into that?

How do you think the insurer pays the wages for the person who called, the building they were sat in, the chair they were sat on, the desk they were sat at, the phone they called on, the phone line they used?

Physical costs aside, there is the cost of regulation and the upkeep of staying compliant (including staff training) to add to the above costs.

By the high insurance premiums & the (usually ridiculously priced) add ons, do you not think that this is all added into the 'quote'?

Not my problem if they are not able to beat/match a lower quote from elsewhere.

For example, say a new customer contacts an insurance provider for a quote, they go through all of the work to get them the lowest quote however it's not quite good/low enough and the customer declines. They wouldn't then charge that customer an admin fee for the work they've done to get it, only for the customer to then reject it, so how is this any different?

FlameCloud

You have created work for them. Why should other customers have to pay for your admin work?

Quentin

Nate_J wrote: »

For example, say a new customer contacts an insurance provider for a quote, they go through all of the work to get them the lowest quote however it's not quite good/low enough and the customer declines. They wouldn't then charge that customer an admin fee for the work they've done to get it, only for the customer to then reject it, so how is this any different?

Like any company the cost of sales is built into their prices.


Those companies that don't include the admin fees are being fairer to their customers - those that cause the admin pay, (as advised above), those that do not want to change the original goalposts don't pay!