Charged for not renewing insurance

Hoonercat

Has anyone else had this experience with their insurers?

My home insurance with the Coventry runs out at the end of January, received a renewal notice but the price had gone up considerably so shopped around for a better deal.

Phoned the Coventry today to say I wouldn't be renewing and was told that I'd have to pay a £25 cancellation charge:eek:

I argued that I wasn't actually cancelling the insurance, I just didn't want to renew it, but they insist that this still comes under their cancellation charge.

How can they get away with charging people for NOT wanting their insurance?:mad:

mattymoo

Sounds like somone has given duff info at the call centre.

Insurance is a contract - and normally that contract runs for 12 months. In return for a premium (which you've paid) they will insure you for that period. At renewal, you enter into a new contract for another 12 months, or as you wish to do, walk away and enter a contract with a different firm.

You are not cancelling the contract unless you have bought some kind of 24 or 36 month policy which, AFAIK, do not exist in the household market.

Grab your policy book, ring them back and ask them to tell you the page and paragraph of the clause that says they can make this charge. I suspect they will point to one that relates to mid term cancellation (e.g. before end of the 12 month contract) and this clearly does not apply here.

Hoonercat

Thanks for the reply, spoke to them again and they insist that there will be a £25 cancellation fee, though the person I spoke to couldn't tell me where this condition could be found in the policy booklet so will ask the marketing dept to write to me with details next week.

The Coventry say it is a 'rolling contract' and something that most insurers do (never had this before). I asked how it could be a rolling contract when the premium changes at the same date each year and the only explanation was that they automatically renew it unless told otherwise.
Maybe I should just cancel the direct debit? Though I also have a mortgage with them

lisyloo

Though I also have a mortgage with them

Ah, this might explain it.
Some mortgage providers do indeed charge £25 if you don't take your home insurance with them.

I suspect that cancelling the direct debit won't work.
They probably have it in their Ts and Cs that they can transfer it to your mortgage debt.

Why don't you ask your new insurer if they will cover the cost? (I've seen this advertised in the past) or you could look at quidco cashback or just take the hit if if the saving is greater than £25.

I am afraid I think it's all above board now that you have said it's from your mortgage provided.

Hoonercat

Hmm, don't think it's anything to do with having a mortgage, when I initially took out the mortgage I was insured elsewhere and only moved to the Coventry insurance 2 years later.

I've since spoken to the new Insurance co, they haven't offered to pay the fee but did say that a handful of insurers have this charge in place (as opposed to 'most' according to the Coventry).

The new insurance co don't have cancellation charges, might be worth people's while to enquire about this whenever you switch companies.

Still don't understand how this is legal though, it's a very underhand way of getting money from people for doing nothing:mad: Maybe if they were more competitive they wouldn't have to:rolleyes:

jonesMUFCforever

You could always threaten to take your mortgage elswhere if they persist in charging you, or insist they they price match your new quotation.

Hoonercat

ejones999 wrote: »

You could always threaten to take your mortgage elswhere if they persist in charging you, or insist they they price match your new quotation.

Mortgage is fixed until October, and they couldn't come close to the other quote

lisyloo

when I initially took out the mortgage I was insured elsewhere and only moved to the Coventry insurance 2 years later.[?QUOTE]

Did you switch to a different mortgage deal?
It could be a term of the mortgage deal you are on.

I would persist in asking them where this clause is in your agreement.
You could try making a complaint via their complaints procedure.

Hoonercat

No, it's a five year fixed which I took out a couple of years before using them for the insurance.

Forgot to mention, the lady did say that it may have been a case of policy change in which case a letter would have been sent out to me, if so I didn't receive one, I'd have changed policies straight away on principle alone.

bootman

Check with who you want to go with. A lot actually advertise that they are willing to pay the £25 fees for moving away to go to them.

Hoonercat

bootman wrote: »

Check with who you want to go with. A lot actually advertise that they are willing to pay the £25 fees for moving away to go to them.

So is this fee fairly standard? I can understand a cancellation fee for cancelling during the policy, but not at the end.

Other insurance co won't pay the fee. TBH, I'm saving quite a bit by moving insurance but was disgusted by this non-renewal fee.