Cancellation of Home Insurance

gazza57

My mortgage is with the Alliance & Leicester. When I took out the endowment mortgage they sold me their House/Contents insurance. When I found a better deal I cancelled the insurance and they aknowledged this in 2001. However they never reduced the payment and as such I've been paying extra interest with no reduction in term or capital cost. Can I reclaim this overpayment for the last seven years and how do I go about calculating the loss?

lisyloo

Can I reclaim this overpayment for the last seven years and how do I go about calculating the loss?

Yes, you are entitled to the money money back.
Firstly call them and see what they say.
Hopefully they will agree straight away that it's an error.
If you have trouble then start a formal complaint following their formal complaints procedure. I suggest you keep a copy of the letter.

The easiest solution may be ask for the payments you've already made to be applied to your mortgage to reduce the capital and hence the term.
But their "system" may dictate how they have to deal with it.
Obviously you will quite rightly want any interest either refunded or deducted from your capital.

I would suggest getting the error sorted first and then worrying about the checking the calculations once they've agreed. The first step is to get them to agree there was a mistake and get them to rectify it.
Keep a copy of the letter you mention (where they acknowledge cancellation).
If you need to send it off then send them a copy and keep the original.
This is very valuable evidence so keep it safe.

dunstonh

Before you go off claiming all sorts, have you actually spoken with A&L about this?

It could be resolved very easily and may not require a load of letters and hassle. The easiest route is often the best and in this case you need to speak to A&L to see what they say first.

Once it is ascertained where the money has been going and if you have had benefit from it or not then it can be looked at as to what should happen.