Insurance cancellation question

[BankFodder]

I suppose that this is especially for UncleBulgaria, I suppose – but anyone else can join in.

 

How does http://www.legislation.gov.uk/uksi/2013/3134/regulation/6/made paragraph 6b square with the advice given here https://www.citizensadvice.org.uk/debt-and-money/insurance/managing-your-insurance-policy/cancelling-an-insurance-policy/ ?

 

On my reading, CA seem to have got it wrong.

[ThedaBara]

I'm in a dispute with my insurers over auotmatic renewal... I cancelled too late and when they couldn't take the monthly direct debit payment, they took an unauthorised amount from my debit card for the whole year, whilst cancelling my policy. TB

[BankFodder]

I'm in a dispute with my insurers over auotmatic renewal... I cancelled too late and when they couldn't take the monthly direct debit payment, they took an unauthorised amount from my debit card for the whole year, whilst cancelling my policy. TB

I think that it would be helpful if you start a separate thread on this. I'm sure that you will get lots of advice about it.

[unclebulgaria67]

Seems clear to me that the Consumer regulations linked to do not apply to Insurance contracts.

 

Insurance cancellations rights/cooling off periods have always been separate and i think CAB is correct. But their explanation is a bit wordy.

 

If you cancel before the policy cover starts as you have selected a future start date, you get a full refund of the premium, but would have to pay reasonable administration fee.

 

If you cancel within 14 days cooling offer period and cover has been provided, then you pay for the days cover has been provided and have to pay reasonable adminstrative fee.

 

If you cancel after 14 day cooling off period and cover has started, then you have to pay all premiums as the Insurers have written in the Insurance contract, as their terms of cancellation. In addition you have to pay reasonable administrative fee.

 

The bone of contention is what admin fee for cancellation is reasonable. It should be what is required by Insurers/brokers to cover their costs and they should be able to justify their reasonable admin fees on request. All Insurers/brokers charging admin fees should have a worked out calculation of how they arrived at their admin fees. Consumers unhappy with admin fees should complain and ask for a breakdown of the fees. If not supplied then they should ask for the fee back or to be waived or the complaint escalated to the FOS.

[BankFodder]

Thanks for this.

 

I don't completely understand what you're saying. I understand that you agree that the Consumer Regulations don't apply to insurance contracts.

 

What I don't understand then is how the CA is correct and what law is it which obliges insurance companies to provide a 14 day cooling off period. I would agree that a reasonable administration fee should be payable in the event that the insurance company is doing you a favour, but if they are obliged by law then I would have thought that no fee would be payable – unless that law says otherwise.

 

Our insurance companies obliged to provide a 14 day cooling off period? This is what they say on the CA website

[unclebulgaria67]

Then you have the unfair trading terms that apply to mid term cancellations. Insurers should have written the terms compliant with The law. If people think the terms are unfair they can complain, as explained in this FOS link.

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

[unclebulgaria67]

Perhaps it is me with my brain struggling after a virus, but i think CAB is mostly correct, but it is not well written.

 

It is so long ago that coolling off periods and these cancellation terms came in. But they are confirmed in ICOBS.

 

https://www.handbook.fca.org.uk/handbook/ICOBS/7/?view=chapter

[BankFodder]

Yes - but what about the 14 day cooling off period?

 

It seems to me that there is no cooling off period in insurance contracts and that means that the CA advice

You may want to cancel an insurance policy if you have just bought it and have changed your mind. By law, you have a minimum 14-day cooling-off period during which you can cancel the policy for any reason. If you’ve bought life insurance, the cooling-off period is 30 days.

is wrong.

 

Unless there is some other set of regulations around. In particular, the 30 day cooling off period for life insurance – I have heard of this somewhere but I can't remember where. It suggests to me that there must be some other regulation somewhere but unfortunately CA don't give their sources.

[BankFodder]

Then you have the unfair trading terms that apply to mid term cancellations. Insurers should have written the terms compliant with The law. If people think the terms are unfair they can complain, as explained in this FOS link.

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

Brilliant

thank you, that explains it all.

[ThedaBara]

But are 'cooling off' periods relevant in auto renewal...? TB

[unclebulgaria67]

But are 'cooling off' periods relevant in auto renewal...? TB

 

Insurers quite often include a 14 cooling off period after renewal. I am not sure the law requires this, but it might make practical sense to treat each 12 months the same. It is then less complicated.

 

You have to remember back to why these cooling off periods were brought in. It was when people started to buy their Insurance over the phone, rather than to visit an Insurance brokers. Because they were buying Insurance without being able to see anything, they were given 14 day cooling off period from when the Insurance documents were received.

 

With auto renewal which is a later innovation, i don't think it has been considered in regard to what affect it has on other rights. If an Insurers significantly changed the terms of the Insurance, i would argue that auto renewal is probably challengeable or that a new 14 cooling off period should be allowed. If for example you made a change to cover for a specific peril e.g exclude flood arising from water table increase or you doubled the premium for a particular postcode area, then these are significant changes. Whilst Insurers are required to bring significant changes to a policyholders attention, not all people properly study the details or not immediately on receipt of documents. Insurers normally issue renewal documents about 3 weeks ahead of renewal so people should make urgent enquiries if not received within 2 weeks of renewal. If they unsure about any changes in cover, they should phone Insurers for an explanation.

Edited August 4, 2016 by unclebulgaria67
Correction

[BankFodder]

That is a great question.

 

I'm sure the answer must be yes but it needs trying out

[ThedaBara]

Many thanks! I am sure they must have sent renewal documents… possibly they went astray as the house next door often gets my mail and I get theirs because the house names both start with the same two words and the postman can't be arsed to check the name… or it might be hidden from view in the envelope window…

No excuses.. I should have kept my eye on the ball, but I've so much other stuff going on, insurance was the least of my problems… up until recently, anyway… I've got no money for essentials (like food) now that they have raided my bank account. TB

[ThedaBara]

Hmmm.. now they are saying I've defaulted and must reinstate the direct debit paments... but they have cancelled the policy and I can't afford to pay them, as I need to arrange cover and can't pay two companies as I am on a very low income... TB