The Great 'Car Insurance Cancellation & Administration Fee' Hunt

Peteholl89

ombudsman-decisions.org.uk/viewPDF.aspx?FileID=58055

See above the Fos commonly agrees with cancellation charges of up to £50 as long as they are clearly documented.

Dadsma is sharing nonsense about admin of £50 being to high its "highly computerised." It is commonly accepted by the FOS that £50 is about average.

You'll have to stick your www. infront of the link I've given as I can't post URL's because I'm a newby.

dunstonh

'a charge' may mean the pro rata premium paid for the time on cover but you need to confirm. I cancelled a policy with another insurer after 6 months. They wanted to return only 10% of the premium and wanted £40 admin fee.

I called the Financial Ombudsman who sent me some decisions on cancellation and what they say are acceptable charges. As a result of this the insurance company refunded 50% of the premium and halved the admin fee to £20.

The ombudsman like it to be relatively pro-rata. It generally accepts less pro-rata in early months as the cost is at that start and the longer time goes on, the more likely that cost is recovered.

An admin fee of £53 seems very high as they are fully computerised and only need a short time for a few clicks of a mouse to cancel and email confirmation. It may cost a pound or two to print and post a letter and cheque but not a lot.

It is within the tolerance accepted by the FOS. There may be a lot of computerisation but the cost of putting those computers in place and allowing the transaction to be handled efficiently has to be considered. Plus, someone still has to key entries.

Beancounter

dadsma wrote: »

The Churchill t&c's say they will 'return any premium paid less a charge for the number of days for which cover has been given and an administration fee of £53'

'a charge' may mean the pro rata premium paid for the time on cover but you need to confirm. I cancelled a policy with another insurer after 6 months. They wanted to return only 10% of the premium and wanted £40 admin fee.

I called the Financial Ombudsman who sent me some decisions on cancellation and what they say are acceptable charges. As a result of this the insurance company refunded 50% of the premium and halved the admin fee to £20.

An admin fee of £53 seems very high as they are fully computerised and only need a short time for a few clicks of a mouse to cancel and email confirmation. It may cost a pound or two to print and post a letter and cheque but not a lot.

Look at my post#243 which reports the Financial Ombudsman's view and rulings on cancellation and admin fees. May I suggest that if you cannot get a full pro rata refund for a reasonable admin fee you complain to Churchill and then to the Ombudsman.

I may do what you suggest, the terms don't make it very clear. My assumption was that the cost of insurance term upto now would be charged and a refund for the rest minus the admin fee would be made but that is open to interpretation.

I will give them a call later and see what the score is.

Lemon_juicer

Not sure if I am posting this in the right place??
My dad sold his car today and will no longer be driving. He has 16 days left to run in his policy with RIAS, I phoned on his behalf to inform them the car had been sold, they want to charge a £27 cancellation fee which I don't understand?? When I asked they just said it had to be paid to cancel, I said to let the policy run but they won't as it's illegal for a car to be dual insured. He paid his policy up front so there is nothing owed regarding the actual insurance payment- any ideas please.