Hastings have cancelled car insurance

[cecilrhode]

sorry if this is too similar to other threads, I did a search but couldn't find another similar case.

 

I took out car insurance in June with Hastings via their website. Today, I receive a letter telling me that due to 'technical problems' when the policy was taken out, they are cancelling the policy.

 

I've just phoned them and been told basically, that all policies taken out on certain dates (10/6/07 - 25/6/07) were priced too cheap and they are being cancelled. Along with their letter, they were kind enough to enclose another quote which was £100 dearer (almost 50%).

 

Now, is what they intend to do legal? As far as I am concerned, we entered into a legally binding contract, and if they made a mistake in their costs, well, tough, they should do their job properly. If I made a mistake on my costs and found I couldn't afford the insurance, they wouldn't allow me to cancel would they? If they did they would make big admin charges.

 

They have pointed out that the policy gives them the right to cancel, but this just means that I have to stick to the terms of the contract, but they can duck out at ant time they like - not much of a contract is it?

 

I've always felt that insurance companies act like modern day highway robbers, but this is ridiculous.

 

Their letter dated 5th July gives me 10 days grace to find other insurance, but according to the person I just spoke to, they cancelled it on the 30th June, so I only have today to find another policy.

 

I've called the Financial Services Authority who said that if it's in the policy that Hastings can cancel, then they can and nothing can be done other than complain. If that's true, it's certainly not fair and shouldn't be legal.

 

Just think, if I'd been on holiday and didn't get the letter, the insurance could end without me knowing and I'd be uninsured.

 

The policy was taken out with monthly payments, and the first has been claimed which confirms that a service has been provided for a consideration, ie a contract was established. The crux of the matter is if Hastings cancellation clause is valid.

 

Obviously, I don't want anything to do with Hastings after this matter has been nor with any company associated with them. Is there a list of companies connected/owned by/owners of Hastings so I can boycott them all?

[bed32]

If you have a letter dated 5th July saying that you have 10 days, then you have at least 10 days from the date of the letter.

 

If the contract says they have the right to cancel then they probably do, and it certainly wouldn't be worth your while contesting it. If you want to you could make a complaint to Hastings, then to the FOS

[cecilrhode]

Thanks for your response. Does the 'Unfair Terms in Consumer Contracts' act not apply? Basically, just because Hastings say they can cancel does not actually mean they legally can.

 

There is no reciprocal right of cancellation, Hastings can cancel any time they like, but I can't, or if I do, it's subject to Hastings control and fees. That's what makes it unfair, and to renege on a deal because they got their prices wrong is most disreputable. As for the cancellation date, would you like to argue after an accident that you WERE insured when Hastings are quick to point out that they 'corrected' their written cancellation date over the telephone at 9.15 am on 9/7/07 or whatever?

 

Just because someone (a big company) puts in in their terms, does not make it legal, or even fair, I just need help challenging their actions.

 

Has anyone else heard of anything like this?

[bed32]

I have an idea that some of the Unfair Contract Terms legislation does not apply to insurance contracts, but I am not sure of the details.

 

Even if UTCCR does apply you still might not be able to use it as you probably do have some form of reciprocal cancellation, and anyway you surely don't want to take this to court

 

Are they offering a full refund of the premium?

 

If you want to take things further then make a formal complaint and then go to FOS. Don't forget that all insurance companies have to report the number of complaints they get to FSA, and they may have to pay if it goes to FOS.

[Rob S]

So Hastings offered a price on their website which you accepted and they have taken the first instalment but they have now realised the price was wrong and want to cancel the policy. Were you issued the policy documentation? If so I would suggest that their cancellation because they got it wrong is unfair and certainly not one of the normal reasons an insurance company would cancel a policy after its inception. It would have been very different if they had realised their mistake prior to the start of the policy and asked for more money then, but the policy has already started.

 

I think the only option you have is to take out a policy elsewhere and then start the formal complaints procedure against Hastings. Go all the way to the Ombudsman if you have to. As you stated if you had taken out the policy then realised it was too much for you and you wanted to cancel it then they would hit you with admin fees for the privilige.

[cecilrhode]

Rob s, your appraisal is correct. The deposit was paid when the policy was taken out, confirmation of the direct debit was received, the policy documentation received, and the policy started. The application was made a week before the insurance was actually required, and the insurance has been running 3 weeks. Yes, they have offered a full refund of the fee paid, but haven't said if this includes the extra paid for paying by instalments. That isn't the point though, we entered into a contract, and they shouldn't be allowed to renege just because they didn't do their sums right (or for whatever other reason). I've lost a whole morning getting new quotes and my new policy is £70 more. Because I haven't got the refund from Hastings, paying for the new policy has left me short. Why should I suffer such stress and aggro because of Hastings dishonourable actions?

[The cobbett slayer]

In my opinion, Hastings are incorrect. You entered into a contract and their right to cancel relies upon material facts in your proposal not being disclosed.

 

That said, if they have given you 7 days notice in writing BY RECORDED DELIVERY that the policy will be cancelled, I would not want to test in Court whether or not you were insured in the event of you being stopped by the police or involved in an accident. The insurance database is incredibly accurate - I was able to tax my car online last week without entering any details of insurance. The DVLA knew that my car was insured and had a current MOT

 

It is also fair to consider that Hastings are also entitled to charge you for the cover they did provide but under the circumstances I would go for a full refund and get a decent policy before taking the car back on the road.

[cecilrhode]

thanks for your comments, Slayer. Hastings informed me by regular post that took 3 days to get here. Just imagine if I'd been away from home - holiday or business. I could easily have been driving uninsured.

 

All facts were divulged, Hastings cancelled the insurance ONLY because their website calculated the insurance costs too low. That's my complaint, that they broke the contract simply because they made a mistake with their costs. No other business would operate like that - just imagine if you did your shopping at a supermarket and as you were loading your car the manager ran out and demanded more money cos they'd priced things incorrectly - trading standards would be on them like a shot, but in this case, they have teh upper hand cos they can simply report the car as uninsured and refuse to pay out in teh event of a claim. Its nothing short of piracy.

[reallymadwoman]

Have you thought about going to the press?

[DeejayP999]

Have you thought about going to the press?

 

I agree that this is probably the best course of conduct. I don't put much faith in the FSO to be honest.

 

From my recent experiences, it seems that insurance companies are wholly willing to ignore their own liabilities (and even their own terms and conditions) when it suits them.

 

I'm of the opinion that far more regulation is needed.

[xrchris]

Not saying what they have done is right but usually all insurance policies state that the insurer can cancel your policy at any time by giving seven days notice irrespective of reason.

 

If you read the cancellation conditions in your policy booklet this will be(should be) quite clear.

[cecilrhode]

Not saying what they have done is right but usually all insurance policies state that the insurer can cancel your policy at any time by giving seven days notice irrespective of reason.

 

If you read the cancellation conditions in your policy booklet this will be(should be) quite clear.

 

that might be the case, but it doesn't make it fair, and it doesn't make it legal. If i were to accept their quote and pay by cheque and write on the back "i reserve the right to cancel this policy at any time buy giving 7 days notice and you may not penalise me in any way for doing so" would not be accepted, so why should things be so one sided?

 

If people want to say that if its in the terms and conditions that they can do so and that makes it ok, then you should remember that for years, banks quoted their terms and conditions for bounced cheques, going overdrawn etc, and look what's happening on that front. Just because its in the terms and conditions does not make it legal.

[xrchris]

At no point did i suggest it was fair or bring into question the legality of the document i was merely pointing out a fact.

 

I would like to see how they can comply with the condition of 'Utmost Good Faith' and also their obligations under contract law ie they made an offer and you accepted that offer in good faith which they have now reneged upon.

[kerrangaddict]

My 19 year old son has just recieved his phone call cancelling his insurance which he has had for eight month for which he paid in full at the time. At the end of this year he would have had three years no claims but what can he do with eight months, as this is not taken in to consideration by other insurance companies.

 

As a yoiung male driver he is penalised anyway, now he loses nearly a years no claims, has a cancelled policy against him (Hastings doesn't seem too keen to put the details in writing for him) and has to find money for a new policy four months before he should.

 

Why can't Hastings offer a bridging policy to cover the rest of the year?

They say not possible.

 

If a shop advertises its goods at a certain price, it has to sell at that price. Are insurance companies above such common courtesies?

 

Anyone any ideas on any further action we can take?

 

Customer care!!! I don't think so.

[Trojan1401]

They can't just cancel his policy especially if he paid in full.

You need to get to the bottom of this. I assume no material changes ro risk forcing cancellation ?

 

They cannot cancel your policy by telephone they must do do in writing giving 7 days notice and also give reason.

 

Something's going on by the sounds of it as this is the 2nd post. Have HAstings been caught with their pants down ?

[Rob S]

My 19 year old son has just recieved his phone call cancelling his insurance which he has had for eight month for which he paid in full at the time. At the end of this year he would have had three years no claims but what can he do with eight months, as this is not taken in to consideration by other insurance companies.

 

As a yoiung male driver he is penalised anyway, now he loses nearly a years no claims, has a cancelled policy against him (Hastings doesn't seem too keen to put the details in writing for him) and has to find money for a new policy four months before he should.

 

Why can't Hastings offer a bridging policy to cover the rest of the year?

They say not possible.

 

If a shop advertises its goods at a certain price, it has to sell at that price. Are insurance companies above such common courtesies?

 

Anyone any ideas on any further action we can take?

 

Customer care!!! I don't think so.

 

What are the reasons that Hastings have given for cancelling the policy?

 

As stated elsewhere, cancelling by phone is not permissible, they should write and give fair notice if they intend to cancel.

[rudekid48]

Some information for you, I have been doing a bit of digging and it looks like Hastings have contacted between 3000 - 3500 people by telephone confirming that their policies will be cancelled in 7 days. It looks like they have had a problem with their systems as they have been quoting incorrect premiums both on-line and by phone. The problem is that the holding Insurer (in this case Highway) are within their rights to withdraw cover if the Broker (in this case Hastings) has misquoted. Not ideal I know and morally wrong. I would suggest that you contact Highway directly and get their take on it. It is worth finding out if it is just a case of the quoted premium being wrong or if normally they would not have accepted your risk. If it is the former then then the error lies purely with Hastings and Highway may (this is a big if!) take your side and allow the cover to stand - this would then be a dispute between highway and hastings for the balance of premium. It is a long shot, considering the number of people affected, but you have got nothing to lose by trying.

[Trojan1401]

Interesting !

 

A bit of a minefield here as Hastings are acting as the agent of both parties here but primiarily for the insured. The policyholder has acted in good faith and accepted consideration (premium) for their offer of a contract which was accepted and therefore binding.

 

Whilst an insurer does not actually need to give a reason for cancellation I think that they should actually stand by the policies issued and any shortfall in premium be reclaimed from Hasting who misquoted. If however there is an issue with Underwriting criteria i.e. unacceptable age/vehicle etc then this may be a problem.

 

If can't be resolved this week, I'll get name of Personal Lines Underwriter at highway. Try e-mal though [email protected] and ask for UW name.

[elnini]

I'd just like to dive right in here and say that this has happened to me too.

 

On Monday this week (August 19th) I recieved a phone call from Hastings, telling me that due to a fault with Highway I'd been misquoted and my policy was being cancelled.

 

This is my first year of driving. I had paid in full at the beginning, with money I had saved. It is now 5 months later and I'm no longer insured. They say that once I return my cartificate of insurance, I'll get a pro rata refund for the rest of the year.

 

But I can't afford another year of insurance with 7 months of refund.

 

 

This isn't really a question as such, because I don't think I'm saying anything that hasn't been said before. I'd just like to add myself to the list of people who are furious about this. I'll be monitoring to see if anything can be done.

 

Thanks to all of you for your information.

[Disillusioned28]

A further tuppence worth for you all. The action taken may or may not be a breach of law, but it is almost certainly a breach of FSA Principle 6 which requires all financial services firms which are authorised in the UK to "Treat Customers Fairly". Apart from all of the points raised so far, when considering a proposal insurance companies tend to ask whether you have ever had any insurance policy cancelled - without a letter explaining that the policy has been cancelled through no fault of your own this might affect future premiums. This would apply for all types of insurance as this disclosure would have to be made for all types of insurance and not just vehicle. Clearly this is unfair. I'd advise all those affected by this to insist on written confirmation of why it is being cancelled - at the very least!!

[rudekid48]

A further tuppence worth for you all. The action taken may or may not be a breach of law, but it is almost certainly a breach of FSA Principle 6 which requires all financial services firms which are authorised in the UK to "Treat Customers Fairly". Apart from all of the points raised so far, when considering a proposal insurance companies tend to ask whether you have ever had any insurance policy cancelled - without a letter explaining that the policy has been cancelled through no fault of your own this might affect future premiums. This would apply for all types of insurance as this disclosure would have to be made for all types of insurance and not just vehicle. Clearly this is unfair. I'd advise all those affected by this to insist on written confirmation of why it is being cancelled - at the very least!!

 

Interesting take on things, most organisations seem to be concious of 'TCF' at the point of sale but not so much post-sale. The FSA have defined the aims of 'TCF' in 6 points (from the FSA web site): -

 

"We have defined 6 consumer outcomes which explain what we want TCF to achieve for consumers.

 

 

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture;

 

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly;

 

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale;

 

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances;

 

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect;

 

Outcome 6: consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint."

 

I would say that 5 & 6 would be the points most pertinent to the circumstances. However, the definition of "unreasonable" in point 6 would be the contentious point.

 

The problem with the FSA is that in broad terms they are based on principles and acting in the spirit of the rules and so a lot of their messages (like point 6) can be ambiguous.

 

Has anyone actually tried speaking to Highway themselves yet? If so, what was the response?

 

Further reading on 'TCF' can be found at: -http://www.fsa.gov.uk/pubs/policy/ps07_11.pdf

 

Be warned, it is a mind numbing read.....

 

Could the fact that hastings are cancelling evertyones policies be classed as 'TCF' ???

[Trojan1401]

Hastings are still advertising on TV which leads me to believe that it could be an Insurer (Highway) issue however the fact that only Hastings appears to be affected and not other brokers, one could then assume that it is a quote engine issue therefore the blame would lie with Hastings and/or the quote engine supplier.

I think those who are affected by this do need to speak to both Hastings and Highway to get the official reason for this then proper accurate advice on how to proceed can then be given.

[rudekid48]

OK, a further update for you....

 

Some people have now received a letter from Hastings confirming the reason for cancellation. It turns out that it was a system error for certain risks. I have lifted this quoted letter extract from another forum...

 

“the reason your policy was cancelled early is that sometime last year a programming error caused the system to quote incorrectly for Highway Choice policies for 2 types of business:- 19 year olds – post code area 40.”

 

So there you have it - the error lies with Hastings and not Highway.

 

I am not personally affected by this but if it was me I would do two things:-

 

1/ Contact Highway directly (see previous posts for the reasons).

 

2/ Register a complaint with the FSA. Every time that the FSA investigate a complaint, the Broker is charged approx £375 for the pleasure regardless of the outcome. It may not get you your cover back but at least you will have the satisfaction of knowing that they are out of pocket! If all 3000 odd affected customers did this, well, you do the maths.....

[elnini]

Thanks, rudekid. I'll get on to the FSA.

 

I received another letter from Hasting yesterday. It read something along the lines of:

 

"Thank you for your instruction to change your policy. Enclosed is an updated certificate..." (or something)

 

Basically, enclosed was a form similar to my insurance certificate, stating that for the period from August 27th (the day they cancel) until March 28th (The day the policy should have ended) they will be charging me £22.50 for withdrawing my legal cover.

 

:/

[Disillusioned28]

Now that you know what you are dealing with ....

 

The FSA do not investigate complaints - they regulate the industry. The Financial Ombudsman Service (FOS) provide an independent service for settling disputes on complaints between customers and insurance companies, banks etc. However, you will have to approach the firm that you want to complain about first of all and make your complaint to them. They then have 8 weeks to settle that complaint to your satisfaction. When they have given you their final decision on your complaint and if you are not happy with that decision, or, if it's sooner, 8 weeks have passed and you still haven't had a final decision from them, you can then refer your complaint to FOS. You can do this online at the following address.

 

our complaints procedure and how to complain

 

Good luck