RCIB Claiming money owed...

jonnybinthemix

Hi Guys,

I have just received an email from Right Choice Insurance Brokers asking me for money because the insurance company they used a couple of years ago went into liquidation and as such they had to obtain insurance for me from elsewhere... I'll paste the email below, but first a couple of points to note:

- Policy taken out in June 2017
- No renewal, policy ran for one year.
- No contact from RCIB to tell me ANY of this at the time (I keep all emails).

My obvious question is, am I actually liable for this payment? Seems unrealistic to do all of this without my knowledge and then ask me for money 2 years later?

Email from RCIB:

As you are aware from our communication to you last year, you previously had an insurance policy arranged through Right Choice Insurance Brokers Ltd which was underwritten by Alpha Insurance A/S (“Alpha”). Unfortunately, Alpha went into liquidation in May 2018.

As a result, your policy with Alpha was cancelled on the date of the liquidation. However, in order to protect your interests and ensure that insurance cover remained in place for you, and also avoid you having to pay again for another insurance policy, RCIB arranged for you a replacement policy with an alternative provider on exactly the same terms as they had with Alpha.

As your broker, the insurance premium you paid for your policy was passed to Alpha in full at the start of your policy. A refund was repayable from the liquidation of Alpha as a result of the cancellation of your policy which was the same amount as the new premium payable to the alternative provider. The amount due to the alternative provider was financed by RCIB on your behalf on an interest free basis whilst we awaited the return of your premium from the liquidation of Alpha.

Since the liquidation of Alpha was announced, RCIB has been working tirelessly on your behalf to recover your money from Alpha. We are now pleased to confirm that we have now recovered the maximum amount available from the liquidation being 90% of the return premium due. We believe we are the only UK broker so far to have recovered any funds. RCIB has not charged anything for this recovery work and trust that you will be pleased with the outcome that we have achieved.

However, this means there is still an amount of premium outstanding for the replacement policy arranged for you of £39.66 which is payable by you in accordance with our terms and conditions. We wish to work with you to recover this shortfall in a fair and reasonable way.

Would you please contact us on 01708 957504 or email policyupdate@rcib.co.uk to make suitable arrangements for payment of the amount stated above.

If your policy is due for renewal over the next few months, or you have moved your insurance elsewhere and would like to return to RCIB, we may be able to offset some or all the outstanding balance against a new policy for you.

Yours Sincerely
Right Choice Insurance Brokers Ltd

MrsWelch

Hi there,

I have received the exact same email today asking for £30.19. I’m really angry about this as I haven’t been with them for over a year and had no problems when I finished the cover and started a new one with another insurance company. I’ve moved house since then too so the letter went to my old address which is also annoying. I don’t think I should pay this on principle but worried about the consequences. All advice welcome.

jonnybinthemix

Hi Mrs Welch,

Did they inform you of the liquidation last year? As they noted in my email that they informed me.. I can confirm they did no such thing.

Jon

eddddy

I guess you can ask them on what authority they arranged a new insurance policy for you when Alpha went bust.

For example,
Do they believe that you instructed them to?
Did the regulator instruct them to?

And if, for example, the regulator instructed them to, what did the regulator say about any shortfall in premium?


I guess you need to bear in mind that the alternative would have been to return the premium refund to you, leaving you with no insurance. So you'd have had to arrange (and pay for) another policy yourself.

jonnybinthemix

My frustration is not being given the choice. I had a dreadful experience with RCIB, and ended up only having the car for some of the policy.. when I tried to get a rebate for the unused time they made the fee's so high that I'd owe them more to cancel it!!

Customer service was dreadful and rude and I totally begrudge giving them another penny.

Realistically, how far can they take this? If I were to simply ignore this email, do they have justification for taking it further?

eddddy

jonnybinthemix wrote: »

Realistically, how far can they take this? If I were to simply ignore this email, do they have justification for taking it further?

• If the contract that you agreed to allows them to charge you the £39.66, then they could make a court claim against you, and you could end up with a CCJ.
  
  But I guess it's unlikely they'd do that for £39.66.

• If the contract that you agreed to doesn't allow them to charge you the £39.66, then there's not really anything they can do.

To be clear, having dreadful and rude customer service probably doesn't put them in breach of contract, but refusing to pay what you contractually owe would put you in breach of contract.

So in that case, you would be 'in the wrong', but they might decide not to persue you.

MrsWelch

Hiya,

They did notify me via email when it was happening but they said I didn’t need to do anything and they were sorting it out. So I wasn’t given an option to pull out, which I would have done because they were a nightmare from the beginning. I agree, customer service was shocking and I remember being quoted on the phone but given a different amount in writing. Anyway, I was pleased when the policy had ended. There was absolutely no mention of outstanding payments at the time. The contract came to a close and I paid all they payments that were on that contract.
I don’t see why I need to pay an additional payment because Alpha went bust.
I think it’s best to wait it out and see what happens.

eddddy

MrsWelch wrote: »

I don’t see why I need to pay an additional payment because Alpha went bust.

In simple terms, that's what happens when a company goes bust.

• You paid a company for an insurance policy.
• That company went bankrupt - so you no longer had an insurance policy
• If you want a replacement insurance policy from another company - you have to pay that other company

The key question is whether you agreed to the broker taking out a replacement insurance policy on your behalf.

(There are complexities in this case, but that's the crux of the matter.)

Keep_pedalling

jonnybinthemix wrote: »

My frustration is not being given the choice. I had a dreadful experience with RCIB, and ended up only having the car for some of the policy.. when I tried to get a rebate for the unused time they made the fee's so high that I'd owe them more to cancel it!!

Customer service was dreadful and rude and I totally begrudge giving them another penny.

Realistically, how far can they take this? If I were to simply ignore this email, do they have justification for taking it further?

Your frustration would have been greater had you been pulled over for no insurance because they failed you sort out alternative cover. Alternative they could have just told you you were no longer insured and you would have had to pay full price for cover elsewhere, and having to deal with the liquidators to get back what they could from the original premium.

jonnybinthemix

Keep_pedalling wrote: »

Your frustration would have been greater had you been pulled over for no insurance because they failed you sort out alternative cover. Alternative they could have just told you you were no longer insured and you would have had to pay full price for cover elsewhere, and having to deal with the liquidators to get back what they could from the original premium.

On the contrary, had they told me that the underwriting insurance company had gone into liquidation I would have taken that opportunity to seek insurance cover elsewhere and been happy to wait for the rebate from the liquidators myself. The fact is, I was never given this option.

I'm sensing that a lot of the thoughts here are "It's only £30, what have they done wrong? Just pay it" - But it's the principle... they did not inform me that this was happening, and for them to chase me 2 years later for money is wrong. If they had given me the choice and I had agreed, I would comply and pay the money which is fair (assuming they can prove the shortfall). However, I was not given any choice whatsoever.

I'm not on here looking for loopholes to avoid paying... it's £30!! It's neither here nor there! I'm here to stand up for us little guys who constantly get bullied and pushed around by these big insurance companies and brokers!

DCFC79

So complain about it then, if the response isnt acceptable then go to the ombudsman.