Hi everyone. My home insurance has been insured through a broker for the last year - payments made to a third party on a loan basis. Due to shortage of funds, I missed the last payment in June. I received a letter from the third party demanding payment of the outstanding £20 (fair enough) but they have added to date a total of £105 in penalty charges. I rang them and offered to pay the £20 (all I can afford) but they refused to take payment unless I agreed to set up a payment plan for their fees. I refused. They wouldn't negotiate. I've had another letter from them today saying that unless I pay £125 within 10 days, they will add another £40. Please could I have some advice. Thanks a lot.

They cannot add these fees unless the original Insurance contract you agreed to states that they can and even then the FSA might have something to say about it, as they seem totally unfair.

Presumably because the premiums have not been paid the Insurance has been cancelled ?

If the policy has been cancelled, write to the broker asking for a full breakdown of the cancellation charges to be provided in writing to you. If these cancellation charges are in line with the terms set out in your policy, then make arrangements to pay these cancellation charges only. When an Insurance policy is cancelled they can charge you a time on risk for the days on cover, plus a cancellation fee of up to £50. But they cannot add any debt collection fees unless you have agreed to these within the original policy term, so do not pay any extra fees.

Don't forget that with any debt collection that is unfair which this is, you can make a complaint. If you call the Consumer Direct helpline, they can contact the relevant Trading Standards on your behalf. Link here

i reclaimed my charges from ins co on buildings ins

got +350 back

there is no legal remit to charge a 'penalty' charge

just the same as the mortgage charges

get 'em back!

dx

Thanks so much for the really useful advice. The payment I missed was the last installment on the policy so there has been no cancellation charge from the broker - in fact I haven't heard a squeak from them. I have spoken to the financial ombudsman who were interested to hear what I had to say so watch this space! I'll let you know how it goes.

Hi. Just to let you know that I received a letter from the insurance company yesterday confirming that they have cancelled the penalty charges and that my account is closed. Strangely enough this was sent one day after the deadline for a response set by the Financial Ombudsman............. So anyway I'm pleased to say that it is sorted. The person dealing with it at the Financial Ombudsman was great as well.