Car insurance cancellation fees Robbery!

charliesangel1984

Hi,

This is my first post so excuse me if I make mistakes! My boyfriend obtained insurance through HSBC about three years ago and it has been consistently more expensive than various competitors. He has finally sorted himself out and organised insurance which will save him almost £90 a month. He has just been in contact with the broker which is now responsible for organising his current insurance (who got it from Zurich) who wants to charge him £250 in cancellation charges. Apparently they said that as he pays monthly, the broker now has to refund the remainder of the policy to Zurich and that the £250 is an admin charge for that inconvenience! Incidentally, his insurance renewed automatically about three weeks ago and he didn't receive any documents detailing the policy etc... He has just found out from the broker that his premium is now £1,199!!!! (He is a blooming police officer for goodness sake!)

Obviously, I understand about the 14 day cooling off period etc... (I used to sell insurance), but does anyone else think that £250 is extortionate! Also, shouldn't there be some redress associated with him not receiving any paperwork (he hasn't even received a new certificate with this year's info on it).

He is, as I am sure everyone can understand, massively frustrated with this situation. He is a relative newcomer to the whole MSE way of life but seems to be being hugely penalised!

Thank you for any help you can offer!!!

dunstonh

but does anyone else think that £250 is extortionate!

Not really when its based on the annual premium and a fixed cancellation point that is probably around 2 months plus an admin charge.

Also, shouldn't there be some redress associated with him not receiving any paperwork (he hasn't even received a new certificate with this year's info on it).

Everyone who forgets to not renew claims that but everyone who renews always seems to get it.

mikey72

charliesangel1984 wrote: »

Hi,

This is my first post so excuse me if I make mistakes! My boyfriend obtained insurance through HSBC about three years ago and it has been consistently more expensive than various competitors. He has finally sorted himself out and organised insurance which will save him almost £90 a month. He has just been in contact with the broker which is now responsible for organising his current insurance (who got it from Zurich) who wants to charge him £250 in cancellation charges. Apparently they said that as he pays monthly, the broker now has to refund the remainder of the policy to Zurich and that the £250 is an admin charge for that inconvenience! Incidentally, his insurance renewed automatically about three weeks ago and he didn't receive any documents detailing the policy etc... He has just found out from the broker that his premium is now £1,199!!!! (He is a blooming police officer for goodness sake!)

Obviously, I understand about the 14 day cooling off period etc... (I used to sell insurance), but does anyone else think that £250 is extortionate! Also, shouldn't there be some redress associated with him not receiving any paperwork (he hasn't even received a new certificate with this year's info on it).

He is, as I am sure everyone can understand, massively frustrated with this situation. He is a relative newcomer to the whole MSE way of life but seems to be being hugely penalised!

Thank you for any help you can offer!!!

Go through their complaints precedure, if that has no success complain to the ombudsman.

charliesangel1984

Dunstonh,

He didn't receive any renewal or subsequent paperwork. I am aware of the situation surrounding the distance sale of financial products and believe that you must be informed in a timely fashion of any changes to the T&Cs of your policy. If you are not satisfied you are entitled to cancel, but how could he do this when he wasn't provided with the requisite information?

Also, it was not a fixed cancellation charge - they calculated it at 20% of the total year which seems highly disproportionate.

It would seem that brokers act through a completely obscure loophole which enables them to demand completely ridiculous cancellation fees. We have contacted the FOS and they have informed us to always go direct as brokers have you over a barrel.

dunstonh

Also, it was not a fixed cancellation charge - they calculated it at 20% of the total year which seems highly disproportionate.

That is standard across the board. You pay x% of the premium depending at the point you cancel. There is also normally as admin fee of up to £50 added to it.

It would seem that brokers act through a completely obscure loophole which enables them to demand completely ridiculous cancellation fees. We have contacted the FOS and they have informed us to always go direct as brokers have you over a barrel.

The FOS have ruled on these in the past that as long as the terms are published and they are relatively pro rata, there is not a problem with them.

j9faulk

I have read with interest the threads relating to excessive cancellation fees as I am in the same position myself. Whilst I agree that there should be some redress for insurance companies as the contract is being terminated early I do believe that the costs are excessive. Our car has died a death and needs to be scrapped. We are currently paying £27 per month. To cancel the policy would cost £112.00 which is two months payments plus their cancellation charge. We have found an alternative car which I asked for a quote on and there is a £30 administration charge which is fair enough and we were quoted a new monthly figure of £42.00. This is a 50% increase in the premium. I wouldn't mind if I had brought a fancy expensive car but this is a Peugot 307 which is a Group 15 Insurance and the car that is being scrapped is a Ford Galaxy Ghia which is Group 24! I queried why it was so expensive and was told it was because it is a younger car however there is no difference financially between the two as the Galaxy is a more expensive car to begin with. Top this off with the fact that on the price comparision websites the same insurance company is coming up with £27.41 per month with less excess for the same car and it is obvious to see my frustration! When I asked the insurance company why I could get it for the same price as I am paying now for my current car but they want an extra £15 a month I was told it was because I would get more discount for a new policy. Surely this cannot be right that you can be held to ransom like this by an Insurance company? If I choose to leave it will cost £112 but if I stay it will cost me £165 more in monthly installments due to the high insurance quote. Money is tight and we are trying to save every penny is there anything we can do?

veiledlady

Hi all i posted a concern about cancellation fees back in June or July saying they charged me more than just a cancellation fee anyway i complained with a letter to the company and yesterday got a phone call to say they are refunding the money i was charged as it was blah blah blah sorry didn't understand a word after she said i was getting refunded, i thought she was gonna refund the £74 odd pounds but they're refunding £281 so it does PAY to complain sometimes so don't just sit there letting it bubble in your head at least you can get it off your chest if you write to them and you might even get some money back :j

nick1981bg

you think 35 is a lot i was just told that i hav to pay £600 to cancel my policy...... is that atall legal please some1 i need advice thanks:(:(:(:(:(:(:(:(:mad::mad::mad::mad::mad::mad::mad:

dunstonh

nick1981bg wrote: »

you think 35 is a lot i was just told that i hav to pay £600 to cancel my policy...... is that atall legal please some1 i need advice thanks:(:(:(:(:(:(:(:(:mad::mad::mad::mad::mad::mad::mad:

There is no company out there with a cancellation charge of £600. Most stop at around £50. I suspect you are mixing up cancellation charges with outstanding premium to be paid.

How was that £600 broken down?

wendlebury

just had a similar situation took out ins on a car less than 1 month ago but over the 14days unfortunately circumstances meant had to sell the car, the 'broker' wants another £50 on top of the deposit and one installment paid so out of a policy cost of £290 (one off payment price ) it is costing us £190 !!!! for less than ONE months ins. Ok to say if you dont like the terms and conditions dont buy the policy but when buying we dont know we are going to cancel? show me a company who doesnt charge a fortune to cancel, am in business myself but £190 out of £290 am sorry but cant agree with such an amount, its time the insurance companies got sorted the rising prices are enough to make even the normally honest people to take risks with insurance, blame uninsured drivers for the price hikes but there are so many and increasing because some are being priced out of their cars It has to stop somewhere as an owner of a motorspares I constantly hear customers of all ages so disgruntled about ins costs, I queried the validity of the charges our broker was charging with a local broker, the staff there agreed its getting out of hand and making their job VERY difficult, they added they charged £50 to cancel a policy which took them 5-10 mins and agreed that paying out over 50% of the policy for less than one months ins is pretty ridiculous !!!!