1st Central Charging Arrangement Fee for service not even commenced!

GeneralOD

I used MSE's compare tool, got car insurance from 1st Central, then called my original insurer to cancel, but was offered a better deal.
I now want to cancel the 1st central insurance, due to start in 5 day's time, but they want to charge a £50 "arrangement fee" for this! Not only am I within my 14 day cooling off period, but the insurance hasn't even commenced, so they want to levy a £50 charge for doing nothing!

They say it's in their policy documents, but you don't even get these until you've paid for the insurance. Surely this can't be legitimate practice?

When I did the same thing with RAC they gave a full refund, no questions. 

I have sent an email complaint to their complaints department, but I am concerned that they will increase the charges if they simply wait to respond long enough for the insurance to start. What should I do?

eskbanker

Cancelling during the 14 day cooling-off period

As a financial product, car insurance policies are legally required to come with a 'cooling-off period', which gives you the right to cancel no-questions-asked during the first 14 days. This begins when you receive your paperwork or when the cover starts (whichever is later). 

If you cancel your insurance during this two-week period, you are legally entitled to a refund.

Important: The refund won't cover any days for which you were insured during the 14 day cooling-off period and you may still be charged admin fees, so check the terms and conditions.

https://www.moneysavingexpert.com/insurance/car-insurance/cancelling-car-insurance/#refund

Arrangement fee £50

The arrangement fee is non-refundable and is included within the overall total.

https://www.1stcentralinsurance.com/legal-information/important-information

Aylesbury_Duck

GeneralOD said:

I used MSE's compare tool, got car insurance from 1st Central, then called my original insurer to cancel, but was offered a better deal.
I now want to cancel the 1st central insurance, due to start in 5 day's time, but they want to charge a £50 "arrangement fee" for this! Not only am I within my 14 day cooling off period, but the insurance hasn't even commenced, so they want to levy a £50 charge for doing nothing!

They say it's in their policy documents, but you don't even get these until you've paid for the insurance. Surely this can't be legitimate practice?

When I did the same thing with RAC they gave a full refund, no questions. 

I have sent an email complaint to their complaints department, but I am concerned that they will increase the charges if they simply wait to respond long enough for the insurance to start. What should I do?

1. Ask nicely, because it appears they've done nothing to breach the contract or your rights.

2. Reevaluate the overall cost compared to the offer from your current insurer.  It might be that with this £50 charge, you're better off not cancelling the new policy and letting your current policy lapse, instead.

DullGreyGuy

GeneralOD said:

I used MSE's compare tool, got car insurance from 1st Central, then called my original insurer to cancel, but was offered a better deal.
I now want to cancel the 1st central insurance, due to start in 5 day's time, but they want to charge a £50 "arrangement fee" for this! Not only am I within my 14 day cooling off period, but the insurance hasn't even commenced, so they want to levy a £50 charge for doing nothing!

They say it's in their policy documents, but you don't even get these until you've paid for the insurance. Surely this can't be legitimate practice?

When I did the same thing with RAC they gave a full refund, no questions. 

I have sent an email complaint to their complaints department, but I am concerned that they will increase the charges if they simply wait to respond long enough for the insurance to start. What should I do?

Pay the fee and stay with your old insurers or don't pay it and commence with 1st Central. Before deciding you may want to do some searches on what 1st Central are like as a broker, there are plenty of threads on here about them.

Insurance companies are entitled to charge administration fees for cancelling, many years ago it was deemed that up to £50 was reasonable and companies were told to expect to have to justify anything higher. With more than a decade of inflation since that it's somewhat lucky they are only charging £50. 

First lesson to learn... complete all your enquiries before buying. Second lesson... read the documents before buying. Third lesson... maybe do some research on the company before buying.

If you do decide to stick with them you will be asked to provide your driving license, V5 etc and they will double check every answer you gave was fully accurate. If you estimated you owned your car 3 years and they find it was actually 2 years and 10 months then you can expect another admin fee and an additional premium to correct the fact. 

GeneralOD

Thanks for all your responses.

Following an official complaint, they have agreed to refund the administration fee, on the basis that the contract had not started.

PHK

That was incredibly lucky as its not unusual for there to be an admin fee and they had done work on the insurance. 

Drrobboc

I bought a Mini a couple of months ago to teach my daughters how to drive. I insured the car with 1st Central. When they turned 17 I tried to add them to the policy but the company refused to insure them. I asked to cancel my policy and they've charged me £50. Apparently the fee is noted on page 7 of the customer agreement. I think that's outrageous. They should warn customers of the cancellation fee before they commit to the policy on the payments page. Don't touch them with a bargepole.

sheramber

Drrobboc said:

I bought a Mini a couple of months ago to teach my daughters how to drive. I insured the car with 1st Central. When they turned 17 I tried to add them to the policy but the company refused to insure them. I asked to cancel my policy and they've charged me £50. Apparently the fee is noted on page 7 of the customer agreement. I think that's outrageous. They should warn customers of the cancellation fee before they commit to the policy on the payments page. Don't touch them with a bargepole.

You had two months cover.
All companies charge a cancellation fee if you cancel after the 14 day cooling off period.

DullGreyGuy

sheramber said:

Drrobboc said:

I bought a Mini a couple of months ago to teach my daughters how to drive. I insured the car with 1st Central. When they turned 17 I tried to add them to the policy but the company refused to insure them. I asked to cancel my policy and they've charged me £50. Apparently the fee is noted on page 7 of the customer agreement. I think that's outrageous. They should warn customers of the cancellation fee before they commit to the policy on the payments page. Don't touch them with a bargepole.

You had two months cover.
All companies charge a cancellation fee if you cancel after the 14 day cooling off period.

They can charge cancellation fees from the moment you buy it... cooling off periods give you a right to cancel, not in all cases does the law stipulate it has to be fee free.