CANCELLATION/ADMIN CHARGE - Is this LEGAL ?

[TractorGirl]

Can an Insurer or intermediary charge an admin/cancellation fee for a policy that hasn't even come into force yet ?


Cheers TG xx

[LemonTwist]

There is a 14 day cooling-off period for people buying personal insurance. So charging a cancellation fee for a policy which hasn't come into force yet wouldn't be legal, so long as you bought the policy less than 14 days ago.

However, if the policy cover has already started then I think you can be charged a cancellation fee, even if you cancel it within the first 14 days. In that case you would be charged for the proportion of the cover you used as well.

[TractorGirl]

The policy is due for renewal on 26th January and I've told them to lapse it but they want to charge a fee because they sent have already send the docs out......I never told them to renew it but because it is on DD it is on an automatic renewal unless told otherwise.......I AM telling them otherwise but they still want to charge a fee to lapse it basically

This is totally unethical in my opinion

[LemonTwist]

I assume you bought your policy from an intermediary rather than direct? I don't know quite so much about how intermediaries operate, but I think they do sometimes charge fees when a direct insurer wouldn't. On the documents they originally gave you, there should be a list of all the fees that the intermediary charges. Is the cancellation charge listed on there?

[TractorGirl]

Don't know as it was insured by a Leaseholder who has forwarded me those docs........I will just write to the FOS and request this be looked into as Insurers or brokers shouldn't charge a fee to Lapse a policy as the contract has run its course

[sang33ta]

I think they are using excuses not to refund.

Last year I've had similar problem Adrain flux who asked for photos of my car and copies of the driving licence which took ten days to arrange and post back before they decided to ask fro an extra £100 or cancel my policy!

Now again this year I've again been sold an incorrect policy and even though it was spotted before the last insurance ran out and the new one issued the Post Office is claiming the order is in the system and they can't cancel it until I send the cover note back or pay them more moeny!

I'm of the opinion it's a scam and I've kept all my evidence this year and will take them to court if they try make a cancelation charge out of it

[rudekid48]

Tractor girl,

Who is the Broker?

You do not have to pay this charge - they are just trying it on. You are not cancelling the policy if it hasn't come into force, you are lapsing it.

Stick to your guns and refuse to pay - nake sure you have taken out new cover from the date that the old one expires - you may ned this to prove that the old policy wasn't needed.

Let us know how you get on.

[TractorGirl]

It is all sorted, once they realised that I am an Underwriter working for THAT insurance company they quickly retracted that plan