Cancellation

Gazanemmjen

Hi

My daughter was renewing her car insurance with another company online today as hers had gone up in price. This was done and she got in touch with her old one who then discounted it by £20 month. Great news. She went back to the one she'd just set up paid £160.00 to and they charged her £50.00 to cancel this. Can they do this, it was within a space of half an hour online. Does DSR not apply here? Any guidance would be greatly appreciated, thank you

Sandtree

Gazanemmjen said:

 Does DSR not apply here? Any guidance would be greatly appreciated, thank you

No, Financial Services are exempt from DSR however they have their own requirement to give you a statutory 14 days cooling off period. The problem you will find is that a cooling off period means you can cancel in that time, it doesnt mean there can be no fees for cancelling it.

Fees have to be proportional to the cost incurred for cancellation HOWEVER this can be done on an averaged basis rather than individual. About a decade ago a former client was asked to provide the average cost of cancellation and for new business it was just north of £100 and therefore the £45 admin fee they charged at the time was deemed to be more than reasonable. A decades worth of inflation etc would suggest that £50 isnt unreasonable. 

All fees etc have to be highlighted in the documents and so she can double check the £50 admin fee is in there but it would be a highly rooky mistake if it wasnt.

As always... get your new business quotes, speak to your insurers etc before then deciding if to renew with your existing insurers or buy a new business policy with someone else. And do this 21 days before your renewal date to get your best prices. Never buy a policy and then think about if you made the right choice or not.

Hasbeen

Gazanemmjen said:

Hi

My daughter was renewing her car insurance with another company online today as hers had gone up in price. This was done and she got in touch with her old one who then discounted it by £20 month. Great news. She went back to the one she'd just set up paid £160.00 to and they charged her £50.00 to cancel this. Can they do this, it was within a space of half an hour online. Does DSR not apply here? Any guidance would be greatly appreciated, thank you

So original insurance gave her a discount of £20 per month = £240 per year off"? But second company only charged £160 year?

I would have stayed with second company.

What she should do in future is shop around get quotes and then ask if original company will price match.