Policy cancelled due to non-payment rights

lifeadminavoider

Good afternoon everybody.  I've tried to search for a solution to this on the forums already, but have resorted to creating my own post as I can't find many bits of advice pertaining to the situation I've found myself in.  Deep breath, it's a long one!

In December 2018 I got a new job for which I had to relocate and bought my first car, and as I was in the middle of moving house and job my Dad offered to not only lend me the money towards the car purchase itself, but also paid my insurance premium upfront for me, which I know I'm very fortunate to have relatives able to help in that way.  

Wind forward to 2019's renewal - three weeks before, I shopped around and actually ended up with a really good deal with my current insurer - couldn't be happier with them at this point.  However, unbeknownst to me when taking out the original policy in 2018 my Dad selected the option to have paperwork communicated via post, not email (as a long term renter and moving fairly often I always prefer have things communicated digitally where possible).  Anyway, I eventually notice a letter from my insurer and open it, to discover to my surprise that my policy has been cancelled due to not being able to take payment from my card.  Obviously I do a bit of digging and soon realise the error is that my Dad's card had expired during the year and was not updated.  Assuming this will be an easy fix, I ring up my insurer and lo and behold it's not.  It now means my premium is more than it was when I was a first time driver, and worse, I apparently now have to select the box "have you ever had an insurance policy cancelled by the insurer" every time I get quotes for anything.  

In attempting to find advice about specifically what I can do about this, the answer is always the same that it's basically tough luck and unless they reinstate the original policy them I'm forever condemned to pay a higher premium just because a) they couldn't take a payment and b) didn't deem it important enough to contact in two of the other three ways they could have.  

Anyway, I complained about this and received the reply that because they shared their T&Cs with me that I basically haven't got a leg to stand on, which while technically correct doesn't seem to be in the spirit of "fair and reasonable" on the side of the customer - I'm sure it's easy for them to say they've been fair and reasonable, as technically they've done nothing wrong, it just appears to be a loophole they're exploiting.  Put it another way - they sent three reminders that the payment hadn't gone through, I did not receive the first of these and only opened the second when I'd opened the third, which was the one informing me my policy had been cancelled.  They're not exactly important looking letters, they're just mailmerge documents sent out automatically.  It's all a bit fishy, almost like they wanted the policy to cancel itself so I would have to pay a higher premium... or is that too cynical?  

I just think that in this very specific scenario that the question I have to answer is incredibly unfair - I believe that particular wording is to protect insurers from customers who might have had policies cancelled due to fraudulent reasons, not because of simple honest admin errors.  Is there anybody who has had any success with taking a case like this further, to the Financial Ombudsman or similar (which I only have a couple of days left to do - hence why I've been prompted to look further at my options!)?  Or do I begin a campaign of letter writing to my local MP?  

I'm fortunate enough that my parents were able to bail me out for the next year's premium, as the company then also then wouldn't accept monthly payments.  I just think that there must be people for whom this sort of innocuous error leads to severe financial hardship, for if you're someone who relies on their car to get to work and pays their premium monthly, then something like this happens and they aren't fortunate enough to be able to find the whole year's premium out of thin air then you could risk losing your entire livelihood just because you didn't see a letter!  

I appreciate insurance is a business of working out what the risk is to them, and people who take out policies and don't pay for them are probably the same sort of people who are careless about other things and this may form part of their risk profile - but to have to check that box EVERY SINGLE TIME I ever get quoted for insurance FOREVER because I missed a payment is absolutely crazy, especially in world where we have things like credit files which have time sensitive black marks on them.  

Anyway, thanks for reading, and if anyone has any advice on the steps I should be taking to get this removed from my record I would be very grateful. 

Sandtree

Whilst we live in an increasingly digital age, post is still seen as the most formal method of communication and so often is used for serious matters like this. The law states that a letter is deemed received 2 working days after its posted, there is no equivalency for emails etc.

As to looking like mail merged letters... thats what they are! A company doesnt get a quill and vellum out to personally pen you a letter about non-payment. Most insurers send thousands, or tens of thousands, of letters a day and thats before you add in direct marketing etc. To be honest there are others on here complaining theirs got cancelled with only one reminder, the fact you got 3 should be seen as a company trying harder to get your attention. 

If you feel it is unfair then you should escalate the complaint to the FOS before you are time barred from doing so. You can explore other avenues whilst the FOS are mulling it over. I do somewhat agree that the "have you ever" is harsh, especially as other comparable "sins" do tend to drop off after 6 years but there are no laws stating they have to consider a shorter period. 

lifeadminavoider

Sandtree said:

Whilst we live in an increasingly digital age, post is still seen as the most formal method of communication and so often is used for serious matters like this. The law states that a letter is deemed received 2 working days after its posted, there is no equivalency for emails etc.

As to looking like mail merged letters... thats what they are! A company doesnt get a quill and vellum out to personally pen you a letter about non-payment. Most insurers send thousands, or tens of thousands, of letters a day and thats before you add in direct marketing etc. To be honest there are others on here complaining theirs got cancelled with only one reminder, the fact you got 3 should be seen as a company trying harder to get your attention. 

If you feel it is unfair then you should escalate the complaint to the FOS before you are time barred from doing so. You can explore other avenues whilst the FOS are mulling it over. I do somewhat agree that the "have you ever" is harsh, especially as other comparable "sins" do tend to drop off after 6 years but there are no laws stating they have to consider a shorter period. 

Ha! Thanks for your reply, gave me a chuckle.  I shall now be demanding they send everything via carrier pigeon. 

I know they're mail merge documents, they definitely parroted a line back at me several times about how many things they have to deal with when I queried why they didn't follow it up with a different method of communication after the first letter went unresponded to... it just struck me particularly that it doesn't seem fair if they have too many customers and not enough staff to also, y'know, ring me up and tell me there's a problem when the financial penalty is so disproportionately harsh!  

For what good it will do, I've escalated the problem to the FOS.  I think I've got the answer I need there - basically what I'd be asking for is a complete overhaul of the system of risk profiling to include different nuances for "why" the policy was cancelled, or the introduction of a system where it's time sensitive.  Surely that is the least people in the same situation deserve?  To be treated with such a blanket observation is at worst discriminatory of the circumstances the customer was in when the policy was cancelled.  For a whole industry that operates in such an arcane fashion where simply wording your job title slightly differently can net you hundreds of pounds off your premium, it seems a bit rigged in their favour that there must be loads of people inadvertently trapped in an endless cycle of being either unable to obtain a rival quote or relying on the same insurer every year for something that happened decades ago!  If this is such a severe penalty, why isn't more made of it in popular discourse?        

Hasbeen

Op. Sorry but to sum it up.

You renewed your policy at a better deal relying on your father paying it again on his card?

This card had expired, so the insurance company sent you 3 letters? and because you rely only on digital communication.  

You did not open them?

When you eventually opened the 3rd one you found out your insurance was cancelled.

And as you quote on your post.

"people who take out policies and don't pay for them are probably the same sort of people who are careless about other things and this may form part of their risk profile"   So self answered?

You can complain to the FOS. But have you actually WRITTEN a Letter marked Complaint explaining the circumstances and POSTED it to the insurance company. In an envelope with a stamp?

I am assuming you are still with the original company?

Old_Lifer

All your problems with this seem to have originated when you allowed your father to arrange the policy.    Naturally, if  the insurer was asked to send all communications by post, that is what they would do.    If you had dealt with  setting-up the policy yourself,  presumably  none of the errors would had occurred.

As you say yourself ,   the insurer has  'done nothing wrong'.    

Sadly ,   I cannot see further  complaint getting anywhere.

k12479

lifeadminavoider said:
... it just struck me particularly that it doesn't seem fair if they have too many customers and not enough staff to also, y'know, ring me up and tell me there's a problem when the financial penalty is so disproportionately harsh!  

It keeps the prices down for everyone else. Why should I pay more for my insurance to assist those that can't be bothered to manage their own affairs?

frederick1950

Quote..
"Anyway , I eventually notice a letter from my insurer and open it " 
Who doesnt open their post ?
You have shot yourself in the foot here by a sheer failure to manage your affairs.
I dont mean to sound harsh but I competely agree with the insurer when they say you
 'dont have a leg to stand on '.
Yet you try to wriggle out of your self inflicted problem as if insurers should now change their whole systems to suit your ineptitude.

rs65

lifeadminavoider said:

For what good it will do, I've escalated the problem to the FOS.  I think I've got the answer I need there - basically what I'd be asking for is a complete overhaul of the system of risk profiling to include different nuances for "why" the policy was cancelled, or the introduction of a system where it's time sensitive.  

You won't get that from the FOS.  Their job is to look at your complaint and see if you were treated fairly by your insurer

csgohan4

I do comparisons for my parents as they don't use the internet as well, I even pay for the policies too, you could always do that and ask for the money back to avoid issues with non payment. 

The fact the insurer sent the policy holder 3 letters which weren't opened, who's fault was that?

Sandtree

Hasbeen said:

You can complain to the FOS. But have you actually WRITTEN a Letter marked Complaint explaining the circumstances and POSTED it to the insurance company. In an envelope with a stamp?

There is no requirement for a complaint to be made in writing unless that is the stated complaints process for the insurer and the vast majority state you should phone them.  The OP states they have already received a final response from the company and given their FOS rights.

lifeadminavoider said:
it just struck me particularly that it doesn't seem fair if they have too many customers and not enough staff to also, y'know, ring me up and tell me there's a problem when the financial penalty is so disproportionately harsh!  

Why did you choose this insurance company? Because they were the cheapest?  Do you know how they became the cheapest? Is it by having an extra 1,000 staff to make outbound calls to customers who don't respond to letters?

Insurance is a distress purchased commodity, 99.9% of customers buy on price and so it is a race to the bottom of how you can trim your running costs to shave 10p of the premium and therefore increase your sales.

An interesting paper was done by one of the very well known brands that considers themselves consumer champion and ethical (I want to say it was the Post Office or Co-op but I don't think it was) and they found that customers were willing to pay just £1.25 more per year to go with their brand -v- a totally unheard of company in Gibraltar and about £0.10 more against another household name like Axa or Churchill.

dunstonh

've escalated the problem to the FOS.  I think I've got the answer I need there - basically what I'd be asking for is a complete overhaul of the system of risk profiling to include different nuances for "why" the policy was cancelled, or the introduction of a system where it's time sensitive.

The FOS is not a regulator.  It is an independent arbiter of complaints.   There is no point asking them about systems changes.

And the major issue you have is that you disregarded communications from them that you have confirmed you did receive.

For a whole industry that operates in such an arcane fashion where simply wording your job title slightly differently can net you hundreds of pounds off your premium, 

How else do you price risks on occupations?  (and it is completely valid to have the occupation as a priced risk).  It is consumers that are playing around with occupation types.