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Broker admin fee

OwenPerkins
Posts: 10 Forumite
Hi all.
A broker I use is asking for an admin fee for insurance I've bought through them which is paid separately from the premium and direct to the broker. The policy is paid by monthly direct debit and the policy is now in force.
I don't have a problem with this but they are saying that if I don't pay it by a certain date they will "Instruct your insures to cancel your policy. This will leave you without insurance protection and you will be liable for any premium due."
My question is do brokers have the power to cancel a policy because their separate admin fee has not been paid?
I'm going to pay it but I'm interested to know the legal position.
Thanks for any guidance.
A broker I use is asking for an admin fee for insurance I've bought through them which is paid separately from the premium and direct to the broker. The policy is paid by monthly direct debit and the policy is now in force.
I don't have a problem with this but they are saying that if I don't pay it by a certain date they will "Instruct your insures to cancel your policy. This will leave you without insurance protection and you will be liable for any premium due."
My question is do brokers have the power to cancel a policy because their separate admin fee has not been paid?
I'm going to pay it but I'm interested to know the legal position.
Thanks for any guidance.
0
Comments
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I have not seen a broker charge an admin fee for insurance for a long time (probably 10 years).
Whether or not the broker can cancel the policy will depend on what you have signed. But it would put them on shaky ground should you decide to make a complaint.
If they cancel it I assume they would get a clawback on commission? Are you sure their paperwork says you would liable for premiums or does it say for any clawback in commission?
I have no idea who you have used for your insurance but they sound like a firm I would not want to deal with personally.
You need to have a read through the paperwork you have signed/agreed to.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
What type of insurance is it?0
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Lots of brokers do charge admin fees on commercial policies with small premiums.
Yes, they do have the power to cancel policies. But you also have the power to 'sack' them and replace them with another broker. This won't alter the fact you owe them an admin fee though, if you agreed to pay one when you took the policy out.0 -
Thanks for that. The broker is Jelf. I haven't waded through the paperwork and I probably won't bother because I've just paid it anyway. I'll certainly look around when it comes to renewal though because, as you say, this is not the type of people I like to deal with.0
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I live in a place with a large communal garden. The insurance is mainly for public liability.0
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The policy costs £48 per month through Jelf. Don't know if that counts as a small premium. I didn't object to the fee, it was the threat to cancel the policy. I've paid it now and I'll write to them with my feelings and look at my options on next renewal. Thank you all for your replies.0
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Some brokers have started to unbundle their remuneration. Especially in areas that are arranged on a nil commission basis and require a fee to be made or where the commission is so low that they cannot use it to cover their costs.0
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