Charged for not renewing insurance

lisyloo

So is this fee fairly standard?

I've seen it on quite a few mortgages.

but was disgusted by this non-renewal fee.

If it's not in your agreement then dispute it and get it back.
You need to go through their formal complaints procedure. It won't cost you anything.

If it was in your agreement then you should have seen it (sorry to sound harsh but a contract works both ways).
I understand your posistion in principle but personally if I'm saving a fortune then I tend to overlook the "little things".
It's almost impossible to find a contract that is perfect and great value.
There is usually a trade-off somewhere.

However if you didn't agree to it then I would encourage you to fight it.
I've won 6 complaints and haven't lost any.

Hoonercat

Right, finally managed to speak to someone who knows their job
The woman I spoke to yesterday said the charge was because the insurance automatically renews itself, therefore you need to cancel it, hence the charge :mad: Today I find out that it's because I have a mortgage with them also, they have an interest in the property and so charge the £25 as an admin fee to cover the cost of checking the new insurance (yeah, like it costs them £25).
So why call it a cancellation charge??? :mad: It's an admin fee.

skintandsad

Yup, it is an admin fee.
Check the terms of your mortgage offer though...... it should have been stated within the mortgage terms that it was conditional that you took out your insurance with the lender, or else pay a £25 fee for them to check an alternative insurer. I'm sure they can't just charge you an admin fee unless its is writing somewhere within the documents you signed? Worth a punt - I'd ask the Coventry to check where you signed for this.

Otherwise there are several insurers that are prepared to pay the fee for you.

ukdickie31

I had a similar issue with a Lender. I 'accepted' the £25 fee but managed to find a new insurer who not only paid the £25 fee for me, but also saved me nearly 50% on the Lender's insurance.

If it helps, the new insurer was Barclays.

They also do 12 payments interest free.

I think if you use Moneysupermatket.com you get cashback. I did this year (Dec 22nd for a policy start date of 1st Jan) and got £60 cashback on a £144 policy !

Hoonercat

skintandsad wrote: »

Yup, it is an admin fee.
Check the terms of your mortgage offer though...... it should have been stated within the mortgage terms that it was conditional that you took out your insurance with the lender, or else pay a £25 fee for them to check an alternative insurer. I'm sure they can't just charge you an admin fee unless its is writing somewhere within the documents you signed? Worth a punt - I'd ask the Coventry to check where you signed for this.

Otherwise there are several insurers that are prepared to pay the fee for you.

It wasn't conditional that I took out insurance with the lender. I took out the mortgage (as a remortgage, previous mortgage with another lender) and so the house was already insured. The Coventry didn't charge me £25 to check the insurance details, and I certainly didn't sign anything that tied the mortgage and insurance together as they were both seperate. About 18 months after taking the mortgage, the Coventry phoned and asked if I'd be interested in their Home Insurance, sent me details, good quote for good cover and I've been insured with them since. At no point was any mortgage/insurance tie-in mentioned.

Can anyone confirm that I need to have agreed to this in the first place for the charge to stand?

lisyloo

At no point was any mortgage/insurance tie-in mentioned.

Are you absolutely certain it's not in the terms and conditions of your mortgage?
I only ask cos some of mine have been 300 pages before so I wouldn't be able to be totally certain about the contents.

Can anyone confirm that I need to have agreed to this in the first place for the charge to stand?

In some form or other yes but it could have been
a) a specific clause stating that amount
b) a general clause that says "we can charge you admin fees for work relating to your mortgage".
c) a "change to terms and conditions" leaflet which you may not have read.

Again, I would advise, ask them to justify it i.e. point to the specify number of the cluase. If they can't or won't then make a complaint.
If you are indeed right then you have a VERY high chance of success.
The reason is that it will cost them a lot more than £25 simply to argue with you.
If you go to the ombudsman then it costs them at least £350 so it almost certainly won't get that far.

They could have made a mistake, but it's also possible that it's in your mortgage Ts and Cs and you haven't explicity seen it. Most people would not read 300 pages and even if they did, they would not be able to retain the detail with certainty after 5 years so I would question how you can be certain it doesn't apply.
You might be right, you might not.

skintandsad

I am surprised they are charging this fee this far down the line - I would expect them to charge it when issuing a mortgage but it doesn't seem fair to charge it now.

Does this mean they will try and charge it each time you take out a new policy???

I would ask the lender to provide evidence of where this is in the terms and conditions and also how often this fee is payable.

I would be speaking to the Head Office - they must have a department that deals with buildings insurance - they should know the answers.

lisyloo

Does this mean they will try and charge it each time you take out a new policy???

It's usually a one-off fee.

The bit about them checking your policy for coverage it's rubbish.
As you say you can change the policy annually but also they will definitely have something in the terms and conditions about you untimately being liable.
So if the place burns down and you forgot to pay your insurance then you'd be liable.
I am 100% certain (without needing to check) that this would be in every contract.

The £25 is really a punitive fee and they don't want you to go elsewhere but they have to justify it as an admin fee because punitive fees are illegal and can be claimed back.

Hoonercat

lisyloo wrote: »

Are you absolutely certain it's not in the terms and conditions of your mortgage?
I only ask cos some of mine have been 300 pages before so I wouldn't be able to be totally certain about the contents.



They could have made a mistake, but it's also possible that it's in your mortgage Ts and Cs and you haven't explicity seen it. Most people would not read 300 pages and even if they did, they would not be able to retain the detail with certainty after 5 years so I would question how you can be certain it doesn't apply.
You might be right, you might not.

Very true, even if it was in the agreement it's quite possible that I skipped it as I had no intention of using them for insurance. But should it not have been part of the insurance agreement rather than the mortgage agreement?

As said, they didn't charge when issueing the mortgage, though the house was insured elsewhere.

Does this mean they will try and charge it each time you take out a new policy???

That's an excellent point, and one that shows this charge up for what it is, I'll include it when I write to them:T

lisyloo

But should it not have been part of the insurance agreement rather than the mortgage agreement?

Well I can't say in your case, but in the cases where I've seen this fee it's part of the mortgage deal terms and conditions.

As said, they didn't charge when issueing the mortgage, though the house was insured elsewhere.

There are a few explanations.
They might have missed it.
They might have decided not to apply it the first time although their Ts anc Cs allowed it.
They might have changed their Ts anc Cs and sent you some details at some point.

As said, they didn't charge when issueing the mortgage, though the house was insured elsewhere.

They may have decide to waive it even though their Ts and Cs allowed them to charge it because they wanted your business and didn't want to put you off.