Â£45 to cancel a motor policy???

Perseus · 25th April 2007, 15:11

Hi
I've just had a rather heated debate with some jumped up snotty nosed jobsworth from Diamond Car Insurance (my opinion here!).

My other half wanted to cancel her car insurance policy, called up, 'Yeah - no problem, that will be £45 to cancel!'
This is a £45 admin charge to cancel cover. It does not include any pro-rata premiums not paid, purely an admin charge of £45 just to cancel.

According to Mr snotty, who was adamant that because they were regulated by the FSA, and all their T&C's are 'signed off' by the FSA, the charge is wholly justified. If we fail to make the payment of £45 on receipt of their written demand (2 weeks notice), they will pass immediately to a DCA/Court for collection as my other half agreed the terms on renewal each year.
The £45 is on the reverse of the Cert of Insurance.
My OH passed the phone over to me to deal with.

I quoted that these costs surely do not reflect their actual losses, and represent an unlawful charge/penalty. Mr snotty blew up stating that they were specifically agreed by the FSA as justified, and my OH agreed the T&C's when she took out/renewed the policy.

I immediately advised that if he can produce a letter/guidance/confirmaation from the FSA that this particular charge was agreed to be justified, I would pay. In one breath he said - yes I'll get that letter sent out straight away, then back-pedalled and advised that they don't have to justify as it is in T&C's, and stated that they would not have (nor need to produce) the FSA agreement on the charge as it's already been accepted by my OH.

I've specifically put the account in dispute, advised that if they threatenn to disclose to a 3rd party, I'll s10 Data Protection Act them, and complain to the FSA and Information Commissioners Office re charge and disclosure.

The question is.................

Can I legally challenge the £45? If brought to court, can I defend using UTCCR's or something other more relevant...

Any advice anyone, please?

Thank you
Perseus

humbleman · 25th April 2007, 15:55

most insurance companies are doing this now, i have heard of companies charging an equivalent of 1 months premium. Now if you have a monthly premium of £200 then your cancellation is £200, if its £15 then its £15, I dont't see any fairness in that. BTW was this 45 equivalent to 1 months premium.

Perseus · 25th April 2007, 16:31

Monthly premium was £22. The charge is set as a standard £45, and is noted on the back of the cert of insurance if you wish to cancel.
Bloody extortionate.

Surely this is an unfair term?

xrchris · 26th April 2007, 16:14

Quote:

Originally Posted by humbleman

most insurance companies are doing this now, i have heard of companies charging an equivalent of 1 months premium.

Most direct insurers do this but many broker sourced policies have no cancellation fee at all, ok a few do charge but nowhere near the amount of the direct writers.

One example NU Direct canx fee 'up to' £52.50 but NU's Broker sourced policy has a fee of just 'up to' £10.00.

Rob S · 27th April 2007, 10:05

I have no problems with insurers applying short term rates should a policyholder wish to cancel their cover before the policy expires, but adding a cancellation charge of £45 on top is ridiculous. Have you written to them and asked them to give a full breakdown of how they arrive at a cost of £45 for a simple administrative task?

Perseus · 27th April 2007, 10:38

I had a long a very heated debate with this wazzuck, and he reckoned that it was to cover the three or four different departments that have to deal with a cancellation!
Either way, I'll be defending any action if they cannot produce a breakdown of the actual costs/losses incurred.
Stuff 'em.

humbleman · 27th April 2007, 21:51

Quote:

Originally Posted by Perseus

I had a long a very heated debate with this wazzuck, and he reckoned that it was to cover the three or four different departments that have to deal with a cancellation!
Either way, I'll be defending any action if they cannot produce a breakdown of the actual costs/losses incurred.
Stuff 'em.

They might have to goto 100 different departments, thats their problem, cancelling a policy is just a press of button.

These companies fail to realise that their business is to issue and cancel policies, its part of their business all the rest of the fees/charges is just a way of extra revenue. Surely that will not have to do overtime just because you cancelled your policy to justify the charge, its just part and parcel of their job.

DollyDayDream · 28th April 2007, 16:19

I have just changed my policy and foolishly did not read all the small print on the back. Saga (yes, I'm a grandma!) want to charge me £138.82 for cancelling a policy.

I had assumed that any contract I had with them was for the existing policy until it expired, and that unless I chose to renew it there could be no further contract. Their attitude seems to imply that they have the right to assume that I will always choose to renew with them, rather than check out other options. I would like to know the Financial Ombudsman's opinion and also the OFT.

DDD.

Perseus · 28th April 2007, 23:06

Well hello, Dolly.

I used to work for Saga Car Insurance many moons ago...

They used to operate a policy of;_
Cancellation in the inception (1st) year of business = £10 admin plus a pro-rata refund of the annual premium (if paid in full at the start of the policy).
Cancellation in the Renewal or subsequent years = £10 cancellation admin fee.

Can you tell me...is this your renewal year of the policy?
If so, when was the renewal date?
If it's your 1st Year, when was it started?

Unless (as I've found out) they quote an admin charge for cancellation, they cannot ask you to pay insurance premiums for a risk they are not insuring.

As with mine, I will be challenging the admin fee they are trying to squeeze from us. It is wholly unjustifiable, therefore a penalty in my mind.

Perseus

DollyDayDream · 29th April 2007, 12:36

Hello Perseus

I have had the policy since 2004 and paid by direct debit. The renewal date was April 24th. I sent back the papers saying I did not want to renew (and cancelled the direct debit). I did not make a note of the date I sent it back to them. I think it is outrageous that they can try to do this. Surely this is a case for the Insurance Ombudsman and the OFT?

DDD.

xrchris · 30th April 2007, 08:39

What was your reason for not wishing to renew?

If it was because you changed insurer or did you no longer have the car?

Rob S · 30th April 2007, 09:24

Dolly, can you clear something up please? Has your old policy expired and you have taken your business elsewhere, or are you trying to cancel your policy with Saga mid term?

Perseus · 30th April 2007, 12:54

Quote:

Originally Posted by xrchris

What was your reason for not wishing to renew?

If it was because you changed insurer or did you no longer have the car?

Hi
SOld the car, phoned the same day - and because he policy had auto-renewed more than 14 days before - that's when they recon that the charge is justified (as per the back of the insurance cert!.

IIIUMINATI · 30th April 2007, 13:02

What Happens If The Policy Holder Dies ?

IIIUMINATI · 30th April 2007, 13:07

Read the policy and strike out any terms which you do not agree to.
If the company acepts ok if not move on.
Good marketing point for the better companies no penalty charges
should you be unable to drive.

DollyDayDream · 30th April 2007, 18:08

It was the end of the policy, and they sent me the papers for a further year. I found a far cheaper policy elsewhere. Because I paid by direct debit they seemed to think they could hold me to ransome!

DDD.

xrchris · 30th April 2007, 19:26

Quote:

Originally Posted by DollyDayDream

It was the end of the policy, and they sent me the papers for a further year. I found a far cheaper policy elsewhere. Because I paid by direct debit they seemed to think they could hold me to ransome!

DDD.

Just write a short note to say you had arranged alternative cover and provide a photocopy of the new insurance document. This should sort your problem out with the right result. (i am assuming the new policy started on the renewal date of the previous policy).

Rob S · 30th April 2007, 20:19

Quote:

Originally Posted by DollyDayDream

It was the end of the policy, and they sent me the papers for a further year. I found a far cheaper policy elsewhere. Because I paid by direct debit they seemed to think they could hold me to ransome!

DDD.

They are really taking the mick! Did you inform them before the policy expired that you would not be renewing with them?

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