Cancelling an insutrance policy before it starts

reitop_d

Hi,

On Saturday (13/6) I found a quote for car insurance through 1st central and said I'd like to go ahead with it starting on 31/7. My current provider got me a cheaper quote today so I stayed with them. I just called 1st central and they said that there is a £50 arrangement fee which is non-refundable which I had to pay to cancel a policy that hasn't even started yet! I've just been forced to pay it and I honestly feel like I've just been cheated out of £50. They say it's on the website but I'm well within my 14 day cooling off period but I still have to pay.

Can anyone help with this?

Thanks,
Dave

csgohan4

What did it say in the T+Cs regarding cancelling within the 14 days if at all that matter?

Quentin

Whenever you are not happy with your insurance company the route to go down is a complaint in line with their complaints procedure

Then if you are not happy with the reply or they ignore you for 8 weeks you can escalate to the FOS for their adjudication at no cost to you

But in your case read up the TS & CS you agreed when taking out the policy

They will have set out what happens when you cancel and will include any admin/arrangement fees that cancellation involves

Always check what you are agreeing to before ticking the box!

If you read up on this company, both here and online you may find you have a lucky escape, and worth the fee to be out of it!

Boggles190

How did you buy the policy? Online, in a store or over the phone?

sheramber

https://help.1stcentralinsurance.com/cancellations/how-much-do-you-charge-if-i-cancel-my-policy

Cancellation within 14 days of the policy's start date

If you decide to cancel your policy within 14 days from the start date, we will not charge a £50 cancellation fee.

Any optional extras you have purchased will be refundable within the first 14 days.

The arrangement fee of £50, which is included as part of your annual premium, is non-refundable.

These fees are charged at the time of cancellation, alongside a pro-rata charge for the time you've been insured.
Cancellation before the start date of your policy

If you decide to cancel your policy before the date your policy begins, we will not charge a £50 cancellation fee.

Any optional extras you have purchased will be refundable within the first 14 days.

We have the right to retain the arrangement fee of £50 if you have cancelled before your policy has started.

Boggles190

I would suggest this reported to the FOS anyway. Whilst what they are doing may not specifically breach the cooling off period ‘rules’ it seems to very much go against the spirit of the regulation.

Practices such as this give the industry a bad name and should be looked into by the regulators.

Quentin

Boggles190 wrote: »

I would suggest this reported to the FOS anyway. Whilst what they are doing may not specifically breach the cooling off period ‘rules’ it seems to very much go against the spirit of the regulation.

Practices such as this give the industry a bad name and should be looked into by the regulators.

Brokers arrangement fees are normally non refundable and insurers cancellation fees are often payable whenever you cancel a policy (though not always)

There are no "rules" regarding these fees having to be refunded are there?

Boggles190

Brokers arrangement fees are normally non refundable and insurers cancellation fees are often payable whenever you cancel a policy (though not always)

There are no "rules" regarding these fees having to be refunded are there?

The purpose of the 14 day cooling off period (as I've always understood it) is to allow the customer to change their mind within that period and cancel without being penalised. The insurer/broker cannot charge a cancellation fee during this period and they can only charge for cover provided.

Charging an arrangement fee on a straight forward personal lines policy, seems like a deliberate attempt by the insurer/broker to still retain a fee if the customer decides to cancel within 14 days, which goes against the purpose of the cooling off period.

Quentin

Were you correct and no cancellation fees had to be paid it would be a money saving wheeze for us all to take out our house/car/travel etc policies and cancel on day 14!

Boggles190

I am correct, in my previous job I dealt with a number of cancellations within 14 days. If cover has been provided then the insurer/broker is entitled to retain an amount of premium to cover the time risk but they cannot charge a cancellation fee. They are entitled to charge and admin fee (which would have to be outlined separately in their T&C's and notified to the customer at the point of sale). The FOS has specifically stated that it considers excessive admin fees charged during the 14 day cooling off period as unreasonable, unfair and unenforceable in law.

How would it be a money saving wheeze when you still have to pay for the cover provided?

I've used the cooling off period myself, not on an insurance product but on car finance. I decided to pay for the car outright and cancelled the finance on day 7. I was charged 7 days worth of interest (exactly what was stated in my credit agreement) but nothing else.

Quentin

You are incorrect - cancellation/admin/setting up fees are charged

Eg admiral (check for yourself) are one group easy to look up! (They refer to it as an "administration charge"- cancel within 14 days and get a full refund minus the administration charge even though the cover hadn't started)