Worming out of the cancellation fee on insurance policy

[jimxms]

I was 2 months into my 2nd year on an insurance policy for my Transit when I decided to sell it. Insurance company wants £150 to cancel early as I opted to pay it monthly.

Normally they've got ya by the balls as its all in the T&C's, but I just noticed that I didn't sign the finance agreement for this years premium that they sent over. My van has been insured and they've been collecting the premium monthly, but without a signed finance agreement in place.

Can I tell them to go fish for the £150 cancellation fee?

[GT9]

Depends, if my premiums go up because you don't want to pay what you owe, then no.

[jimxms]

GT9 said:

Depends, if my premiums go up because you don't want to pay what you owe, then no.

LOL! I'm pretty sure the £150 cancellation fee is just a number they've pulled from the air anyway to gouge as much money from departing customers as they can. If it was a fair amount like £50 to cover admin I'd be more inclined to just suck it up.

[GasEngineer]

Is it a cancellation fee or is it the balance of the premium payable for the two months insurance?

They tend to front load it so if you were to cancel after 6 months for instance you would owe the whole year's premium.

[jimxms]

GasEngineer said:

Is it a cancellation fee or is it the balance of the premium payable for the two months insurance?

They tend to front load it so if you were to cancel after 6 months for instance you would owe the whole year's premium.

I just had a closer look at the letter..

"The return premium allowed by the insurer for cancellation after deduction of our £100 cancellation fee is £738.16. The outstanding settlement on the finance agreement arranged with xxx is £892.62. This leaves a balance payable of £154.46"

So the £54 is whats left of the months insurance, and the £100 is the insurers cancellation fee?

[Jayho]

Did you phone them to cancel or did you do it online? If they have an online portal, always worth checking if you can cancel through there. On the online portal you're essentially doing all the admin for them, there's often no charge for the "admin fee", £100 in your case. So you will only be required to pay the £50 which you will be due.

[Stoofa]

GasEngineer said:

Is it a cancellation fee or is it the balance of the premium payable for the two months insurance?

They tend to front load it so if you were to cancel after 6 months for instance you would owe the whole year's premium.

All car insurance is "front loaded". It's a legal requirement that car insurance is paid, in full, at the beginning of the policy.
When you "pay monthly" you're actually paying back a "loan" or "Credit Agreement" that you took out to cover the premium.

This is where the cancellation fees come in - it's the admin time to cancel loans, credit agreements etc.

[smokey mow]

jimxms said:

My van has been insured and they've been collecting the premium monthly, but without a signed finance agreement in place.

Whether you physically signed it or not it sounds like you have accepted the terms of the agreement as you have been insured and allowed them to take money as per the agreement.

[OverSteery]

smokey mow said:

jimxms said:

My van has been insured and they've been collecting the premium monthly, but without a signed finance agreement in place.

Whether you physically signed it or not it sounds like you have accepted the terms of the agreement as you have been insured and allowed them to take money as per the agreement.

That is my understanding

IANAL, but my commercial manager explained a deemed contract to me.
Google suggests:

In the event that the Contract is not formally signed and executed by both parties, but the parties proceed to act in accordance with its terms, then the Contract shall be deemed to have been accepted by both parties in the same fashion as if it had been signed by them.

[66HFM]

On a slightly related topic, although on house insurance.

We have just moved house into a new rental house, whilst looking for somewhere to buy in a new area. Our contents only policy in the same size house was £49 for 12 months, we moved after 2 months and our favourite seaman insurer wanted to charge me a £39 cancellation fee (80% of the policy fee), I got the whole sum of £2.54 back...

'it's in the terms and conditions....'https://www.pistonheads.com/gassing/imgs/2.gif

[MrBen986]

jimxms said:

GasEngineer said:

Is it a cancellation fee or is it the balance of the premium payable for the two months insurance?

They tend to front load it so if you were to cancel after 6 months for instance you would owe the whole year's premium.

I just had a closer look at the letter..

"The return premium allowed by the insurer for cancellation after deduction of our £100 cancellation fee is £738.16. The outstanding settlement on the finance agreement arranged with xxx is £892.62. This leaves a balance payable of £154.46"

So the £54 is whats left of the months insurance, and the £100 is the insurers cancellation fee?

There are two parties here - your insurer has returned the premium due according to the policy terms, and your broker has then deducted their cancellation fee, which, no doubt, their Terms of Business will state they will do.

The broker's cancellation fee probably covers the commission that they will have to rebate to the insurer, so the cancellation fee effectively means they keep what they would have been paid if you had not cancelled (on the basis they have done all the same work anyway). The interest in the finance agreement will also have an impact on the amount still due - these can be quite high rates.

[MarcoD]

Ask them to lapse the policy as you have sold the vehicle but expect to buy another in a "few" weeks, unfortunately you never actually "find" another suitable vehicle before the policy end date. This stops the premiums being payable from the lapse point and the insurance policy will end at the renewal date.

I did this recently to achieve the aim of your title.

EDIT - just re-read and looks like you've already cancelled so probably too late to do this but will leave it here as it may be of use to others.

Edited by MarcoD on Tuesday 7th November 11:07

[Bennet]

If you they are providing you with finance and you don't pay, that means they will almost certainly record missed payments on your credit report.

In my company's case, that means a poorly trained monkey with your name on a spreadsheet emails it off to Experian or whoever and it gets recorded on your file.

If they deem that you owe the money, the fact that you didn't sign anything won't stop your name appearing on that spreadsheet and won't stop the monkey sending the email.

To get the missed payments removed, you will have to raise a complaint with the monkey's manager (who is an orangutan) and go through a whole faff and maybe even involve an ombudsman.

Credit is regulated, but company processes are still run mainly by monkeys with spreadsheets. Even more fun - you may well pay everything you owe and still accidentally end up with your name on that spreadsheet because someone doesn't quite know how to control-C/control-V properly.

Edited by Bennet on Wednesday 8th November 14:25

[Short Grain]

^^^Monkey and Orangutan insurance^^^

Explains a lot!!

[Biker9090]

Call up and plead poverty/stress etc. If they don't have it then tell them you want to raise a complaint to the Ombudsman, make it clear how you won't accept anything less than X.

I've done this a few times and they actually paid ME.

[KAgantua]

Biker9090 said:

Call up and plead poverty/stress etc. If they don't have it then tell them you want to raise a complaint to the Ombudsman, make it clear how you won't accept anything less than X.

I've done this a few times and they actually paid ME.

same here, i just refuse to pay, say youd like to complain and when / if they come back wihtout deleting the charge just ask to escalate to ombudsman.

[Missy Charm]

KAgantua said:

Biker9090 said:

Call up and plead poverty/stress etc. If they don't have it then tell them you want to raise a complaint to the Ombudsman, make it clear how you won't accept anything less than X.

I've done this a few times and they actually paid ME.

same here, i just refuse to pay, say youd like to complain and when / if they come back wihtout deleting the charge just ask to escalate to ombudsman.

They do, sometimes, but the 'smart' people with a penchant for this unsporting crap often fail to realize that they are engaging with private enterprises which, generally, are more intelligent than they are and recoup the money wasted on complaints elsewhere. Noticed higher premiums recently? The above is one such reason.

To answer the question: the finance agreement will be a different contract to the policy of insurance so whether or not it is signed is irrelevant. The OP will have signed - more likely ticked some electronic box these days - something to accept the terms and conditions of the insurance policy and that is the relevant contract here. The cancellation clause will be in that, and it is binding.

By all means register a complaint and then report the matter to the Financial Ombudsman Service if you so wish, just don't expect your premiums to come down any time soon...

Edited by Missy Charm on Thursday 9th November 21:13