Car insurance policy change/cancellation

ballybrown · 18 September 2017 at 12:01PM

Phoned RAC Insurance to tell them I'd put a towbar on my car and they wanted to charge me £65 extra on top of the policy! Explained that it didn't enhance the power output or anything else for that matter - no joy, still wanted to charge £65, including a policy change charge!

Words fail me, why/how can they justify that.

Anyway went to Direct Line - they're not bothered if you fit a towbar as it is not performance enhancing or anything else.

Went back to RAC and told them I wanted to cancel my policy, only to be told it would cost me £55. Talk about RAGING, this is scandalous that they can rip us off like this.

Have now registered a complaint through the Ombudsman.

Anyone else experienced this? What was the outcome?

Also have a motorhome with a towbar and insurance company don't want to make any extra charges. So why do the RAC? Wont be renewing my breakdown cover with them again either!

paddyandstumpy · 18 September 2017 at 12:41PM

RAC insurance is administered by BISL, not the RAC directly. BISL are just a Broker and your insurance will be underwritten by someone else.

If the insurer feels it appropriate to charge an AP then that is their prerogative.

The charges for mid term adjustments and cancellations will be detailed in the T's + C's which you agreed to when you took out the policy.

Complaining to the ombudsman when you haven't completed the brokers complaints procedure won't get you anywhere.

Aretnap · 18 September 2017 at 2:15PM

The Ombudsman does not get involved in pricing matters, such as whether or not an insurer should charge extra for a towbar. That's seen as a commercial decision for the insurer to make.

For what it's worth, an insurers view of modifications is not driven purely by whether they add to the power or performance of a car. Often it's simply the fact that they mark you out as the sort of person who drives a modified car. Or with towbars (which are admittedly not very boy-racerish) they mean that you're now likely to be using the car to tow a caravan or trailer, whereas previously you weren't, which brings in risks of its own, plus with a lump of metal pointing out of the back of your car you may well be more likely to prang another car while reversing - and to cause more damage when you do.

As for the cancellation fee, the Ombudsman allows insurers to charge a reasonable fee for cancellation or changes to the policy. One of the cases on their website suggests that they found a £50 fee reasonable ten years ago, so with inflation £55 is likely to be reasonable today.

So no I don't see your complaint getting very far I'm afraid.

vtc6 · 18 September 2017 at 5:12PM

I've seen cases of the courts saying charges are unreasonable, even if they are detailed up front in the T&Cs. I've seen that insurance companies are being increasingly regulated e.g. being made to pay up or part pay up, even if policyholder didn't declare something. It's good progress.

I don't think it's worth fighting this though. I would just not declare the towbar. The cases I've followed recently insurers aren't able to withhold a claim due to something unsubstantial like a towbar.

I'm sure the "by the book brigade" will get angry at my suggestion, but it's your call.

Blibble · 18 September 2017 at 6:22PM

vtc6 wrote: »

I've seen cases of the courts saying charges are unreasonable, even if they are detailed up front in the T&Cs. I've seen that insurance companies are being increasingly regulated e.g. being made to pay up or part pay up, even if policyholder didn't declare something. It's good progress.

I don't think it's worth fighting this though. I would just not declare the towbar. The cases I've followed recently insurers aren't able to withhold a claim due to something unsubstantial like a towbar.

I'm sure the "by the book brigade" will get angry at my suggestion, but it's your call.

Wouldn't say I'm angry at your suggestion, more disappointed that you're suggesting OP commit a form of insurance fraud by not declaring. Let's say OP accidentally reverses into a parked vehicle, causing significant damage with the towbar - the insurer would then have a right to refuse the claim due to misrepresentation.

forgotmyname · 18 September 2017 at 6:55PM

They do not charge extra for a towbar if you mention it before taking the policy. In your case its because your making a change mid term.

Captive customer. Pay up or Cancel and err payup.. You lose / You lose?

Aretnap · 18 September 2017 at 9:15PM

forgotmyname wrote: »

They do not charge extra for a towbar if you mention it before taking the policy. In your case its because your making a change mid term.

Captive customer. Pay up or Cancel and err payup.. You lose / You lose?

Who are "they"?

As above, RAC aka BISL are just a broker. The OP could be insured by any number of underwriters, some of whom will apply a loading for towbars, some of whom won't.

If you've got a quote from the RAC with and without a towbar and found them to be the same that just tells you that the insurer they've pairs you up with doesn't load for towbars (at least not for a person with your circumstances driving your type of car) - it tells you nothing about how the OP's insurer treats them.

ballybrown · 20 September 2017 at 7:20PM

Wish I'd kept my mouth shut now.
Yes I don't expect to get anywhere, but unless we put our heads up, companies will continue to charge exorbitant fees to press a computer button, we as consumers need to shout louder if we're going to get treated fairly.

Quentin · 20 September 2017 at 7:32PM

ballybrown wrote: »

Wish I'd kept my mouth shut now......

No mileage in not notifying modifications - if it comes to light (usually at the time of a claim) they have grounds to void the policy

Rags2riches · 20 September 2017 at 8:56PM

paddyandstumpy wrote: »

RAC insurance is administered by BISL, not the RAC directly. BISL are just a Broker and your insurance will be underwritten by someone else.

If the insurer feels it appropriate to charge an AP then that is their prerogative.

The charges for mid term adjustments and cancellations will be detailed in the T's + C's which you agreed to when you took out the policy.

Complaining to the ombudsman when you haven't completed the brokers complaints procedure won't get you anywhere.

It doesn't really matter whether RAC insurance is underwritten or administered by somebody else. RAC is a brand and they should know better than allowing their brand to be used in this way. Its brand dilution.

Co-incidentally I am a member of RAC breakdown (prob a different company still) and when my renewal came through it was up more than if I were a new customer. I phoned them and told them where to go - they reduced it from around £180 to £100 immediately. AA is very similar that its owned by the same company as British Gas.

Unfortunately gone are the days where these automobile clubs were looking out for you... small companies doing right - now its just a money game. You have to ask, beg, plead and threaten to take your business elsewhere for them to listen.

yogavenger · 23 September 2017 at 7:37PM

I've been hit with an unfair cancellation fee today. My car policy auto renewed in May; I was on holiday and turned everything off. Apparently, they sent a txt and email but I didn't get anything. I went to renew today, thinking it due. I was getting emails to say they had taken a payment which I thought a bit odd (I knew there were taking payments, I had arranged it!) Chap said to renew now would increase my premiums so I got insurance elsewhere. Went to cancel and told I need to pay £50. Told them I didn't even realise it autorenewed. Apparently I was told but I don't remember that. They are checking phone recording. If they didn't tell me, they wave it but otherwise I am expected to pay. Crazy.

Car insurance policy change/cancellation

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