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    • sarah1980
    • By sarah1980 20th Oct 16, 10:36 AM
    • 442Posts
    • 379Thanks
    sarah1980
    Insurance default charges
    • #1
    • 20th Oct 16, 10:36 AM
    Insurance default charges 20th Oct 16 at 10:36 AM
    Looking for some advice please. Direct Debit failed in Sept for car insurance (insufficient funds). I rang them up and paid by debit card. They then added a fee of 24 to my October payment which also failed as tbh I had forgotten to put enough money into the joint account to cover the additional 24. They have now asked for an additional 12 on top of the 24 otherwise they are cancelling my insurance and sending me a default notice.

    Does this seem fair? The car insurance is paid in instalments of 17 per month, so this month's payment is 53 due to charges. I don't have the extra 36 until I get paid next week, but equally don't want a default on my file.

    Are these insurance companies governed by similar "fair charges" laws as the banks?

    Any advice would be appreciated.
Page 1
    • dunstonh
    • By dunstonh 20th Oct 16, 10:51 AM
    • 98,597 Posts
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    dunstonh
    • #2
    • 20th Oct 16, 10:51 AM
    • #2
    • 20th Oct 16, 10:51 AM
    Does this seem fair?
    It doesnt seem unfair. You have created multiple admin events and most insurers have a charge for admin events. That is why premiums are lower nowadays.

    The car insurance is paid in instalments of 17 per month, so this month's payment is 53 due to charges. I don't have the extra 36 until I get paid next week, but equally don't want a default on my file.
    When you pay monthly, you are doing it under a credit agreement. It is effectively a loan. So, they have to comply with the disclosure requirements of the consumer credit act. This can lead to quite formal wording being used.

    Are these insurance companies governed by similar "fair charges" laws as the banks?
    There are no fair charges laws with the banks. Plus, the banks won the bank charges legal case back in 2009.

    The Financial ombudsman service publishes complaint outcomes made by the ombudsman and examples of complaints in its monthly publications. Charges by insurers have popped up once in its monthly publication some years back and that fee was 50 and the FOS rejected the complaint as it felt it was reasonable.

    The charges of 24 and 12 do not seem unreasonable. Most insurers publish their tariff online or send it out with the schedule. As long as it matches that, then they have done nothing wrong.

    it is important that you do not default. Not only as you dont want a default on your credit file but also because when insurance has been cancelled by the insurer, it becomes something you need to declare for the rest of your life and you would find most comparison site arranged plans will not offer a price when you say yes to that question.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Moneyineptitude
    • By Moneyineptitude 20th Oct 16, 11:46 AM
    • 24,390 Posts
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    Moneyineptitude
    • #3
    • 20th Oct 16, 11:46 AM
    • #3
    • 20th Oct 16, 11:46 AM
    If they are threatening to default you after such a short sequence of non-payment, that suggests that you have had problems before now.
    Might be an idea to post on the "Debt Free Wannabe" board where you will find a wealth of support and information;
    http://forums.moneysavingexpert.com/forumdisplay.php?f=76
    • sarah1980
    • By sarah1980 20th Oct 16, 12:00 PM
    • 442 Posts
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    sarah1980
    • #4
    • 20th Oct 16, 12:00 PM
    • #4
    • 20th Oct 16, 12:00 PM
    "If they are threatening to default you after such a short sequence of non-payment, that suggests that you have had problems before now."

    No, this is what amazed me, I have insured with them for 5 years and never missed a payment!

    I will never ceased to be amazed by these companies, 36 to re-take a Direct Debit and send a letter. The 12 is the same amount banks would "reasonably" charge but 3 x this seems unreasonable to me. Maybe because I am on a low income it hurts more, 36 is a week's shopping.
    • Moneyineptitude
    • By Moneyineptitude 20th Oct 16, 12:06 PM
    • 24,390 Posts
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    Moneyineptitude
    • #5
    • 20th Oct 16, 12:06 PM
    • #5
    • 20th Oct 16, 12:06 PM
    No, this is what amazed me, I have insured with them for 5 years and never missed a payment!
    Originally posted by sarah1980
    Contact them to arrange some kind of payment plan for the charges. If these are truly first "offences" they may even waive some or all of them.
    • dunstonh
    • By dunstonh 20th Oct 16, 12:18 PM
    • 98,597 Posts
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    dunstonh
    • #6
    • 20th Oct 16, 12:18 PM
    • #6
    • 20th Oct 16, 12:18 PM
    No, this is what amazed me, I have insured with them for 5 years and never missed a payment!
    Car insurance paid monthly is priced on sub-prime terms. it is usually expensive borrowing on par with credit card borrowing and they are typically less forgiving that conventional borrowing. Plus, the profitability on car insurance arrangement per policy is much lower nowadays. So, admin events like these can wipe out the profit. Hence the admin charge.

    You havent just had one loan payment missed. You have had two.

    I will never ceased to be amazed by these companies, 36 to re-take a Direct Debit and send a letter. The 12 is the same amount banks would "reasonably" charge but 3 x this seems unreasonable to me.
    It doesn't seem unreasonable to me. You have created two lots of admin that someone needs to pay for. It is either you or all the other policyholders. So, it is fairer that it is you. This is not 36 for one failure. It is 24 for the first and 12 for the second.

    I sympathise with your budget limitations and I am posting in a way to explain why they do this. Not to necessarily agree with it.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Nasqueron
    • By Nasqueron 20th Oct 16, 1:03 PM
    • 7,603 Posts
    • 4,836 Thanks
    Nasqueron
    • #7
    • 20th Oct 16, 1:03 PM
    • #7
    • 20th Oct 16, 1:03 PM
    You could try asking them nicely to waive one of the charges as a gesture of goodwill given your previous good behaviour, no guarantees but you never know
    • magpiecottage
    • By magpiecottage 20th Oct 16, 1:48 PM
    • 9,114 Posts
    • 5,584 Thanks
    magpiecottage
    • #8
    • 20th Oct 16, 1:48 PM
    • #8
    • 20th Oct 16, 1:48 PM
    Are these insurance companies governed by similar "fair charges" laws as the banks?
    Originally posted by sarah1980
    If you make a complaint, and push it to FOS, then you will find out, I suppose.

    On the other hand, as dunstonh says, the cost of lower insurance is that there is less scope for free extras on the admin.

    Given that FCA Principle 8 requires conflicts of interest between you and other customers to be fairly managed, there does seem to be an argument in favour of this. On the other hand, it also requires them to properly manage conflicts of interest between you and them so an excessive fee would be deemed a breach of the Principle.
    • ceedy1950
    • By ceedy1950 4th Jul 19, 8:29 AM
    • 7 Posts
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    ceedy1950
    • #9
    • 4th Jul 19, 8:29 AM
    • #9
    • 4th Jul 19, 8:29 AM
    Just jumping in this thread for some advice about whether its worth trying a claim ??



    During the many years of my Mortgage ( all paid off a while back with my Credit card) another story in own right ;-)



    Because I chose to use my own preferred insurance company via my Job, C&G charged me a Monthly Fee for not going with their insurers through them .
    I was usng Royal Ins.. but after a dig about I found that Royal was also the Company C&G wanted me to use, but my costs were almost half that That C&G wanted to charge. despite arguing why the costs were greater and it being the same company C&G would not listen. So had tp pay the monthly fee for yonks.


    Could these fees be reclaimable .. ? ta.
    • zx81
    • By zx81 4th Jul 19, 8:48 AM
    • 23,309 Posts
    • 25,859 Thanks
    zx81
    I'm not sure what your complaint is about.

    You had mortgage insurance with your job, but another company charged you a fee? Is that right?

    What involvement did C&G have with your mortgage? Were they the lender? Was their insurance a condition of your mortgage?
    • SonOf
    • By SonOf 4th Jul 19, 9:50 AM
    • 792 Posts
    • 945 Thanks
    SonOf
    Because I chose to use my own preferred insurance company via my Job, C&G charged me a Monthly Fee for not going with their insurers through them .
    Most lenders did back then

    I was usng Royal Ins.. but after a dig about I found that Royal was also the Company C&G wanted me to use, but my costs were almost half that That C&G wanted to charge.
    it wouldnt have been the same policy or coverage though. Each distribution channel would have had its own version depending on what the distributor wanted in the policy.

    despite arguing why the costs were greater and it being the same company C&G would not listen.
    They would listen but they are correct to reject it.

    Could these fees be reclaimable .. ? ta.
    no. Nothing wrong with them.
    • Moneyineptitude
    • By Moneyineptitude 4th Jul 19, 11:35 AM
    • 24,390 Posts
    • 13,903 Thanks
    Moneyineptitude
    Just jumping in this thread for some advice about whether its worth trying a claim ??
    Originally posted by ceedy1950
    You asked the same question on this forum in 2017;
    https://forums.moneysavingexpert.com/showthread.php?p=72187945

    Have you forgotten?

    Nothing has changed, you still don't have a valid complaint I'm afraid..
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