Car insurance cancellation fees Robbery!

dunstonh

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 !!!!

They either did that as they couldnt be bothered to explain or felt you wouldnt listen. What you see as 5-10 minutes work isnt the case. The admin behind the scenes is greater and remember that they have to pay levies and costs that you dont see. Probably to a level of around 1/3rd of their income. Someone also has to pay for the staff time you have used up.

annettewerk

I read with interest the detailed justification proffered for the cancellation fees and of course insurance companies have costs incurred when a policy is cancelled etc. etc.

But as usual they miss the bigger picture..........

THE SCENARIO
Saga have just charged me 2 x £50 for cancelling two policies which had all but doubled in 12 months and were all but double the price of most of the competition. Sadly for me I was away when the renewals arrived, so I missed the cancellation period, the charge stands. Readers should know that Saga have had £8,000 in premiums from me over the past 6 years, no claims or extra costs. Now I submit that their annual renewal fees were probably about the same as the cost to cancel a policy. I renewed 6 times I cancelled once.


How do I feel?
1. I feel used and abused even though I must have agreed to suffer this mealy-mouth, can-I-have-my-ball-back, small-minded treatment.
2. I am also feeling hood-winked that I allowed myself to get into this position.
3. So am I telling the world how great Saga are?
4. Will I ever give Saga another chance?
5. Do I have a nice warm feeling that Saga are right in charging me for leaving them when they have an 86% hike in prices?
6. Do I trust Saga, will I ever trust them again?
7. Is it a cheap shot?
8. Is this a form of press-ganging?
9. Am I happy to cancel all other types of policies with Saga and pay £50 a policy cancellation, You bet, Oh yes, I want out of there and guess what I found better prices on ALL policies.


So Saga have slammed the door, no chance of any repeat business, another try in the future.

AND THE BIGGER PICTURE?
Lose the policy maybe, lose the customer, never!
Why not advertise 'No cancellation fees'
Why not put the cost of cancellations in the advertising or P.R budgets (a tiny, tiny fraction)
Why not respect and value the cost to you of acquiring that customer? don't burn customers so quickly
Why not adopt a 'sorry we lost you on this one, but please do try us in the future'?
or best, why not get real, great competitive and keep the policy and the customer?

Or have I missed something, may be Saga want out of motor insurance and want to squeeze the last drop out of it?


Regards
Annette Werk

mikey72

If you think you have been overcharged, have a read of

https://forums.moneysavingexpert.com/discussion/comment/39938318#Comment_39938318

and make an official complaint.

dunstonh

Saga have just charged me 2 x £50 for cancelling two policies which had all but doubled in 12 months and were all but double the price of most of the competition. Sadly for me I was away when the renewals arrived, so I missed the cancellation period, the charge stands. Readers should know that Saga have had £8,000 in premiums from me over the past 6 years, no claims or extra costs. Now I submit that their annual renewal fees were probably about the same as the cost to cancel a policy. I renewed 6 times I cancelled once.

You were away but failed to deal with your renewals. How is that the fault of the insurer?

5. Do I have a nice warm feeling that Saga are right in charging me for leaving them when they have an 86% hike in prices?

That is not correct. You are not being charged for leaving them because of a price increase. You are being charged as you are cancelling after the policy was in effect. There would have been no charge had you chosen not to renew it.

Why not advertise 'No cancellation fees'

Because the average consumer doesn't care about them and looks solely at the premium. If you remove cancellation fees then the annual premium goes up.

Why not put the cost of cancellations in the advertising or P.R budgets (a tiny, tiny fraction)

The charges are published. Of course, its up to you if you read them or not.

or best, why not get real, great competitive and keep the policy and the customer?

Saga have rarely ever been competitive.

Why not respect and value the cost to you of acquiring that customer? don't burn customers so quickly

The car and home insurance pricing model is crazy. There is no respect to customers as customers have no respect to firms. Its all about getting further up the price comparison engine. Most people have short memories and will be happy to use a company that is uncompetitive one year but competitive the next.

mikey72

dunstonh wrote: »

The car and home insurance pricing model is crazy. There is no respect to customers as customers have no respect to firms. Its all about getting further up the price comparison engine. Most people have short memories and will be happy to use a company that is uncompetitive one year but competitive the next.

This will always be a chicken and egg.

I will use good companies, even if they cost more, as I want them to be there next time.
I'll drop poor ones, even if they're cheaper, as I want service.
Insurers now tend to be in the majority poor if they're mainstream, but I have excellent service from classic and kit car insurers, and don't even shop around, I just use the same company.

annettewerk

dunstonh wrote: »

You were away but failed to deal with your renewals. How is that the fault of the insurer?



That is not correct. You are not being charged for leaving them because of a price increase. You are being charged as you are cancelling after the policy was in effect. There would have been no charge had you chosen not to renew it.



Because the average consumer doesn't care about them and looks solely at the premium. If you remove cancellation fees then the annual premium goes up.



The charges are published. Of course, its up to you if you read them or not.



Saga have rarely ever been competitive.



The car and home insurance pricing model is crazy. There is no respect to customers as customers have no respect to firms. Its all about getting further up the price comparison engine. Most people have short memories and will be happy to use a company that is uncompetitive one year but competitive the next.

Of course all you say is correct, BUT what your industry always fails to register is that most people, unlike your industry, most people are NOT matter-of-fact they need a little love. Its about package definition, so redefine anything that could possibly irritate your client and don't bury anything in small print.

Simple example from other industries POST & PACKING its a real cost, has to be paid for BUT people hate it as an extra, products sell better with P & P included. Same with VAT, has to be paid BUT an item that's is PLUS VAT is perceived as being potentially more expensive than an item that has the VAT included but is 20% more, with 'no hidden extras'. There's no logic to it, its all about human perception. There is loads of documented studies out there to prove the point.

Seduce don't Rape!

dunstonh

BUT what your industry always fails to register is that most people, unlike your industry, most people are NOT matter-of-fact they need a little love.

General insurance is not my industry.

hoodleydoodley

My partner took out van insurance with budget last september. The van failed the mot and as it was old he decided it was time to scrap. He cancelled the dd and then got a letter to ring them as it had been cancelled. He done so, told them he no longer had the van and it had been scrapped. He's now had to pay just over £200 to cover the remaining balance of his insurance that he doesnt want or need! are they allowed to do this???

dunstonh

are they allowed to do this???

Yes. see posts already in this thread to get an understanding of what should happen.

mikey72

dunstonh wrote: »

Yes. see posts already in this thread to get an understanding of what should happen.

Or no.

But the same answer, see the previous posts, there should be a pro rata cost, and up to £50 charge.

You said you cancelled the dd, did you inform the insurers you were cancelling?