Intelligent Insurace - Ridiculous cancellation fees

HTMLHugo

Hi 

Is there any advice anybody can give me for dealing with these people, we needed a new insurance policy and my wife signed up with them (policy due to start in 10 days) but did not trust them so phoned up to cancel them and was told there is a £50 cancellation fee. 

Since the policy hasn't started, and we are well under the 14 day cooling off period i thought i would be able to cancel without any issues. the entire policy is only for £150 so the administration charge seems to be very unreasonable.

[Deleted User]

That seems a very reasonable level of cancellation fee.  It's not related to the policy cost.

dunstonh

Since the policy hasn't started, and we are well under the 14 day cooling off period i thought i would be able to cancel without any issues. 

That is an incorrect assumption.   It is not a right to cancel at no cost.  They are allowed to charge an admin charge that reflects the costs of setting up.  Figures of £25-£75 are typical.  On more specialist insurance, the cost is typically higher than on more mainstream insurance.  

The figure should be no more than their published tarrif.   And I see from their website, they have charged exactly what they say they would:  https://www.intelligentinsurance.co.uk/faq-subject/service-policy-admin/#cancellation

the entire policy is only for £150 so the administration charge seems to be very unreasonable.

Its not unreasonable.   It is an explicit charge regardless of premium.  It would be £50 whether you pay £150 or £1500.   Its purpose is to reflect the average cost of cancellation.     Explicit charging is generally considered fairer for the majority as it means those with larger premiums are not subsidising the costs generated by those with smaller premiums.  For example, if they said they charged 10% of your premium you would pay £15 but someone paying £3000 would pay £300.   Yet the workload and costs are the same with both. Hence why it is an explicit fee.

To be fair, intelligent insurance make it very clear and simple on their website and are doing exactly what they said they would in that scenario.   

HTMLHugo

i don't know £50 for 1 email will never seem reasonable regardless of what the t's and c's state.
Hope this is a lesson to others to be more careful what they sign up for.

[Deleted User]

HTMLHugo said:

i don't know £50 for 1 email will never seem reasonable regardless of what the t's and c's state.

That would be a fair comment, if it was indeed £50 for sending one email. But of course, that's not the case when it comes to setting up and then cancelling the policy.

dunstonh

i don't know £50 for 1 email will never seem reasonable regardless of what the t's and c's state.

I think it is fair to assume you are not in business or management position.  it can be hard for people that have no experience of cost management to understand why something costs what it does.

Broadly speaking the cost of setting up the policy will be around £25-£35 depend on the type of insurance.   The company in question specialise in unusual properties and will employ more specialists in those areas.  The costs of all the staff, IT provision, electricity, rates along with all the provision of regulatory documentation (both behind the scenes and to you), acturial and legal etc etc has to be factored into the cost of the sale.       Then you have the cancellation costs you have created.     All the data regarding your sale will need to be retained.  If a staff member was involved, it will show on their KPIs, it will also need to be declared to the FCA in the 6 monthly and annual RMARs and declared to the PI insurers in their stats.     

With implicit charging, they would have to increase the premiums and everyone pays for the work you have created.   

With explicit charging, they can charge the person that creates the costs - i.e. you.  So, its a much fairer system getting the person who created the work to pay for it.

Sandtree

HTMLHugo said:

Hi 

Is there any advice anybody can give me for dealing with these people, we needed a new insurance policy and my wife signed up with them (policy due to start in 10 days) but did not trust them so phoned up to cancel them and was told there is a £50 cancellation fee. 

Since the policy hasn't started, and we are well under the 14 day cooling off period i thought i would be able to cancel without any issues. the entire policy is only for £150 so the administration charge seems to be very unreasonable.

But you have been able to cancel without any issues... a fee isn't an "issue", it offsets the average cost they incur by you not keeping to the 12 month agreement you signed up to. An issue would be them saying you cannot cancel or making you go through unreasonable hoops to cancel it like only being able to do it in person in their office on Skye thats only open ever other Monday from 10am to 11:15am.

The time to decide if you trust a company or not is before you sign up to a 12 month agreement with them!

csgohan4

OP this will be an expensive lesson, the time for research was BEFORE you paid any money