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Cancellation Charges


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They can't.

 

Write to them and ask them why.

 

If it's because you cancelled early, it's a penalty charge: unlawful.

If it's to "cover their admin costs", you want to see a breakdown of the costs. If it's not a genuine pre-estimate: unlawful.

 

If it's one of the above, or a "just because", you tell them you want a refund or you'll see them in court.

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I've just made enquires to cancel my home/buildings insurance early and been told I will be charged a months payment as a 'cancellation'fee. Does it make any differencve that i pay monthly. Sorry to butt in, if it goes any further i'll start my own post. Ta

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Could you have a look at the T&Cs to see whether or not it is included there.

If it isn't then the problem becomes very easy.

If it is included then we have to go down the penalty charge route which is a bit trickier but quite do-able

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Thanks all. Have checked T and C. It is printed on the bottom of the policy schedule

CANCELLATION CHARGE Our current cancellation charge is one month's premium.

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I think for home insurance this should/could be classes as a penalty.

 

Motor insurance gets a little tricky, as regardless of wether or not you pay monthly, or if you cancel - the policy is still legally in force (at least as far as thrid-party goes) for the full term.

 

So to aska cancellation fee is not even covering their costs of the risk involved, so it probably wouldn't be seen as a penalty.

 

Home insurance is cancelled as and when you cancel it and the risk is no longer carried by the insurer, and therefore I would say that it's a penalty.

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Advice & opinions of Dave, The Bank Action Group and The Consumer Action Group are offered informally, without prejudice & without liability.

Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.

 

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If you pay monthly they cannot enforce the charge as the agreement is to pay per month (unless you have defaulted and not paid for the amount of cover you have had).

 

LOULA

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Sorry, hit wrong button.

 

Also, Insurance companies breakdown a policy into monthly segments not equally in the first year of insurance as to recoup the admin costs of setting up the policy.

 

If I remember rightly - 89% of first year insurance costs for motor policies goes on admin and agout 65% on Household.

 

Not saying they are right or lawful, just what the insurance industries stand might be.

 

LOULA

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Just had the very same problem re car insurance. Although they say I will have to pay all future monthly payments (up to November, about £200.00 ) because I have had a claim in this insurance year. The thing that annoys me is that I bought a new car (group 8) and asked them for a new quote to cover it, replacing my existing group 14 car. They quoted the same premium for the group 8 as the group 14. (Part of the reason for buying the new car was to reduce costs.) When I asked why, they said it was because I had had a claim in this insurance year. I did then ask if there was a penalty for cancelling the policy and was told no. So I went and insured the new car with Direct Line at a reduced cost. Have just attempted to cancel my old policy and been told to pay up. Of course they have your notification of no claims bonus which you need for the new insurers.

Banks, insurance companies, I hate them all!!

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Yes, financial institutions in this country need a bloody good shake up.

If you feel that we have helped you, or you would like to help keep this web site running so that others can continue to get their money back, please click the donate button at the top of the forum.

Advice & opinions of Dave, The Bank Action Group and The Consumer Action Group are offered informally, without prejudice & without liability.

Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.

 

------------

 

 

Add me as your friend on FaceBook - I need all the friends I can get :-(

 

http://www.facebook.com/profile.php?id=577405151

 

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  • 1 year later...

I would like to cancel my insurance policy, which is with Diamond. On the back of my certificate of motor insurance it says there is an admin fee of £45 for all cancellations, I fthink this is a really high amount! What should I do? Should I write to them saying I will not pay the admin fee until they post me a breakdown, should I just pay the total amount, and also if I cancel my policy (Iam fully comp) will my car still be insured to me as thirs party fire and theft until the end of the policy term?

 

I would appreciate advise on this! :???:

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I would like to cancel my insurance policy, which is with Diamond. On the back of my certificate of motor insurance it says there is an admin fee of £45 for all cancellations, I fthink this is a really high amount! What should I do? Should I write to them saying I will not pay the admin fee until they post me a breakdown, should I just pay the total amount, and also if I cancel my policy (Iam fully comp) will my car still be insured to me as thirs party fire and theft until the end of the policy term?

 

I would appreciate advise on this! :???:

 

I don't quite understand your last question - if you cancelled your policy, then all cover would stop from the date of the cancellation and you would then be uninsured. If you only want 3rd party fire and theft cover, you should call Diamond and ask them to downgrade your policy from Comprehensive.

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Just had the very same problem re car insurance. Although they say I will have to pay all future monthly payments (up to November, about £200.00 ) because I have had a claim in this insurance year. The thing that annoys me is that I bought a new car (group 8) and asked them for a new quote to cover it, replacing my existing group 14 car. They quoted the same premium for the group 8 as the group 14. (Part of the reason for buying the new car was to reduce costs.) When I asked why, they said it was because I had had a claim in this insurance year. I did then ask if there was a penalty for cancelling the policy and was told no. So I went and insured the new car with Direct Line at a reduced cost. Have just attempted to cancel my old policy and been told to pay up. Of course they have your notification of no claims bonus which you need for the new insurers.

Banks, insurance companies, I hate them all!!

 

Is this a serious post? When you pay your motor insurance by DD it does not mean that it is a monthly policy. There is an annual premium due and you are simply opting to spread the cost. If you have had a claim paid out on the policy then you still have to cover the annual premium.

 

I understand that people get upset when they are hit with unreasonable charges but lets not get carried away. If you took out a loan for 5k over 5 years to buy a car, then sold the car after 2 years, would you therefore expect not to have to pay the rest of the loan because you no longer had the car?

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  • 2 months later...

I have read through the posts and think I may have got confused. Can anyone advise me about my problem, please.

 

I have been with 1st Quote for over two years and recently sold my bike. When I cancelled my policy which I paid by monthly instalment I was not told that I would have to pay nearly 5 months premiums !!. I think this is a bit steep so I rang, partly to advise that I had shredded my certificate and also to query this charge. I was told that it is because paying monthly involves, essentially, taking a loan over 12 months to pay the premium to the insurers. They want £16 for this privilege and 1st Quote want £30 admin fee for cancelling the policy- Total £46. Apparently it is in the Terms & Conditions that they send out.

 

What do we think about this then and have I got any chance of reducing the amount (preferably to Zero) ? They are sending out new Terms so I can read it for myself, but it just doesn't seem right to me. I will be asking for a breakdown of the Admin charge so I can see what is involved too.

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What if somebody dies? Are these charges still payable then? Knowing these companies they probably are.

 

And people wonder why consumers don't trust the financial services industry...

The views I express here are mere speculation based on my experience. I am not qualified nor insured to give legal advice and any action you take will be at your own risk.

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What if somebody dies? Are these charges still payable then? Knowing these companies they probably are.

 

And people wonder why consumers don't trust the financial services industry...

 

I understand your upset indebt, but please be realistic!! I don't believe any company would charge for cancelling a policy for a deceased client.

( certainly not the one i work for!)

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I understand your upset indebt, but please be realistic!! I don't believe any company would charge for cancelling a policy for a deceased client.

( certainly not the one i work for!)

 

 

Neither would we.

Indebt, your feelings towards financial institutions are well documented on here, but what you fail to realise is that we are still human and do have compassion you know.

 

 

DA

If you find the advice I give is useful, then please feel free to click the scales :)

 

"It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt" :)

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But the same costs are incurred if somebody dies... So in essence I'm subsidising them...

 

This comment is very tongue in cheek but yes I have become very cynical recently, it began when I discovered that insurance providers actually tell people they have the wrong type of cancer.

 

Anyway back on topic I personally would challenge these charges, I guess it depends what you want to achieve. I am prepared for the possibility that I will get nothing back but I'm gambling that the costs in replying to me, dealing with the Ombudsmen and going to court will mean they make efforts to come to some agreement.

 

I think the reason people feel so annoyed by these charges is that, like bank charges, they vary a great deal. The first insurance policy I ever had for my contents bore the mark of the plain english campaign and I knew exactly what I was covered for. I do think that companies take a calculated risk in relation to such charges and possibly even claims, if 7 out of ten people give up then this is a positive result in terms of revenue.

The views I express here are mere speculation based on my experience. I am not qualified nor insured to give legal advice and any action you take will be at your own risk.

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  • 9 months later...

i took out a van insurance policy with budget 1 paid £100 deposit and the rest was to b paid by instalments,aftre 18 days the van went to the scrap yard i rang to cancell the policy ,budget told me it was £35 cancellation fee which the deducted off my debit card,also i had to pay another £48 which again they took from my debit card,when i cancelled i told them not to take any more money out of my account but they did ,is this legal or is it theft

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  • 3 weeks later...

i have been reading these posts about cnc fees . i work for an insurance company and it is clearly stated either verbally or online about these fees you agree to these charges before sales and service proceed with the policy i am not being biased but part of my job is monitoring calls and i am astounded by the amount of customers complaining about not being told about these charges and when i listen back to calls they actually agree to these charges.....all insurance is based on risk factors and material information...... the isurance is then paid up in front by either the brokers or the insurance company themselves ....and the client either settles the account in full or spread across either 11/12 instalments......the first payment is not a DEPOSIT it is 20% of the actual premuim and then the rest are all equal instalments.....when you go to cnc then you are advised about cnc fees and short term rates........a short term rate is a % of the remainder of the policy against what you have already paid.....so depending on how long you have had your policy for this is how it is worked out...so for example if you have had your policy for 3 months you will be required to pay 40%of the remainder of the policy however after 9 months you are looking at having to pay the remainder of the actual premuim plus the cnc fee this is also clearly stated in your policy documents.....and you have 14 days from receiving your docs to check them......some companies charge a process fee in the first 14 days plus time on cover others will only charge you time on cover.....but as insurance providers along with the discount you are provided with when you join the company the companies themselves do not make any profit until you have been with them for 3yrs or more

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also with ref to scrapping vehicles when you take insurance out we are not aware that there is going to be problems with the vehicles we are providing you with a years premuim and the facilities are there to add another vehicle and you are given 30 days to do this

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  • 1 year later...

these things should be clearly stated when a insurance is taken out, not just in a call with words people dont understand, my company has sent me a letter stating they are going to automatically take £85.00 from my account for cancelling my insurance with them, surely this is illegal as i have not authourised this transaction, insurance companies are robbers to me, and they should have stricter rules and clearly written t&cs which have to be returned to them signed, at least we may have more chance of reading the document thourghly, dont know how you say they dont make any money? for starters why have you got a job there if they earnt making money and why set up a business when you are just covering overheads, like i said you should be wearing balaclavas ect!

 

 

i have been reading these posts about cnc fees . i work for an insurance company and it is clearly stated either verbally or online about these fees you agree to these charges before sales and service proceed with the policy i am not being biased but part of my job is monitoring calls and i am astounded by the amount of customers complaining about not being told about these charges and when i listen back to calls they actually agree to these charges.....all insurance is based on risk factors and material information...... the isurance is then paid up in front by either the brokers or the insurance company themselves ....and the client either settles the account in full or spread across either 11/12 instalments......the first payment is not a DEPOSIT it is 20% of the actual premuim and then the rest are all equal instalments.....when you go to cnc then you are advised about cnc fees and short term rates........a short term rate is a % of the remainder of the policy against what you have already paid.....so depending on how long you have had your policy for this is how it is worked out...so for example if you have had your policy for 3 months you will be required to pay 40%of the remainder of the policy however after 9 months you are looking at having to pay the remainder of the actual premuim plus the cnc fee this is also clearly stated in your policy documents.....and you have 14 days from receiving your docs to check them......some companies charge a process fee in the first 14 days plus time on cover others will only charge you time on cover.....but as insurance providers along with the discount you are provided with when you join the company the companies themselves do not make any profit until you have been with them for 3yrs or more
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"but as insurance providers along with the discount you are provided with when you join the company the companies themselves do not make any profit until you have been with them for 3yrs or more"

 

Something is not right here because acocording to your logic no insurance company I've ever been with has ever made any profit (despite me never having claimed). Everybody I know only goes with a company for one year because we are forced onto this merrygoround.

 

A company gives you a decent quote then hikes the price insanely the next year. I HATE shopping around for car and home insurance but I have to because their business model forces me to do this.

 

If I've been with a company for a year and not claimed the premium should go down but it hardly ever does. I even had a situation with Nationwide where I obtained a quote from this website but was told I could not have this price. They forced me to go elsewhere and now send my flyers telling me how good thier home insurance is.

 

Clearly I must be missing something. Honestly I couldn't be bothered to shop around if it wasn't for the fact that it saves a fortune. If the savings was say less than £20-£30 I couldn't be bothered but they seem to make it up as they go along.

The views I express here are mere speculation based on my experience. I am not qualified nor insured to give legal advice and any action you take will be at your own risk.

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