Home insurance cancellation charges

[shona]

This is my first post, so hello.

I'm trying to save money (hence visiting this site originally to get back my bank charges). Last night I was shopping for home insurance and found Halifax were half the price of my existing buildings and contents with the AA.

I phoned the AA to see if they could beat/match the Halifax, which they couldn't. Then I asked what the procedure is to cancel. I asked if there was a charge which the girl said that all I had to pay was my arrears ( as they are a month behind). She didn't say specifically that there was no charge but the implication was that it was just the arrears.

So, I phoned Halifax and took out their policy and called the AA this morning to be told that I owe £63.70, of which £42.43 is 'admin charges' for cancelling. I was so annoyed after what I was told before. Igot them to check call recording and they said that as she didn't say specifically there weren't any they're standing by their figures.

Now, I checked the T's & C's and its says ' If the policyholder cancels within the first month we may charge the policyholder up to £20 commission. If the policyholder cancels this policy after the first month, this charge may increase to £50.'

Does this mean that i have to pay the money? If not, how do I proceed? Also - what is commission - I was told it was admin.

Sorry for being so longwinded but I figured it better to give you all the details from the off.

Shona

[craigwalton]

Personally I would argue and argue, and not pay the commission.

In the t&c it says may.. This means they may not!!!

If you take it high enough they should crumble (and they wont take you to court for £42)

[shona]

Thanks Craig,

Thats kind of what i was planning to do. i have cancelled my direct debit so they can't take it anyway and I'll write them and send a cheque for the difference. Like you say, I doubt its worth their time chasing me for £42.

Does anyone know what they are referring to when they call the charge 'commission'?

Shona

[Tygermoth]

The AA are brokers in most cases for home insurance, as such they will lose the comission to the actual insurer for the duration of your policy.

hope that helps

Tyger

[shona]

So do you think this is something I can still argue (although I will anyway) but I mean am I right to argue or are they entitled to charge commission - is that covered by the same rules as bank charges as being unfair?

[Tygermoth]

I have absolutly no idea - sorry.

One of the big brains should be along shortly and may offer some insight tho.

good luck either way

Tyger

[craigwalton]

I specialise in Claims, but I suppose the AA do have a case. The Insurance is a years contract. You have a £40 get out clause in the contract. As they are advising that it is for lost commision then I can't see you have a legal right, but there are lot of Call Centre managers who cave in at the 1st sight of a complaint!!!!

[shona]

Thanks - I'm going to try anyway. I think the problem is - people cave in when you are an existing customer, threatening to take your business away but less so when the complaint is about a cancellation. I'll see what happens anyway but I wanted to check here as I know you guys have a bit more experience in these things than me.