Cancelling an insurance policy
Discussion
Robb F said:
" But a spokesman from the AA said: “All insurers should, as a general principle, give a refund on a pro-rata basis.”"
Why? Its a company set up to make money, and you've agreed to the conditions, I don't see how anyone doesn't understand this.
Maybe because the option of taking up this contract is not optional and as ALL insurers penalise in this way it makes it unfair?Why? Its a company set up to make money, and you've agreed to the conditions, I don't see how anyone doesn't understand this.
If we as the consumer could choose to take this contract or not then it would be a different matter IMO.
You do get stung for cancellations, especially in the first year (some policies may allow pro-rata returns on subsequent years, not sure if still the case though). Insurers usually apply short period rates (which is what the article said about 70% refund, then decreasing 10% per extra month); the brokers usually claw back the commission they would otherwise be losing on the cancellation refund, plus an admin charge.
I can understand why brokers retain their commission (I have to say that, though) - they've done the work on the policy, and why should they give money away when they're doing more work? I think after the first year, a pro rata refund should be given, minus reasonable costs for admin.
The charges are in the T&Cs, and that's why you get 14 days grace to cancel - read the terms, change your mind go elsewhere. The problem is, most companies will have similar terms.
I can understand why brokers retain their commission (I have to say that, though) - they've done the work on the policy, and why should they give money away when they're doing more work? I think after the first year, a pro rata refund should be given, minus reasonable costs for admin.
The charges are in the T&Cs, and that's why you get 14 days grace to cancel - read the terms, change your mind go elsewhere. The problem is, most companies will have similar terms.
AJI said:
Robb F said:
" But a spokesman from the AA said: “All insurers should, as a general principle, give a refund on a pro-rata basis.”"
Why? Its a company set up to make money, and you've agreed to the conditions, I don't see how anyone doesn't understand this.
Maybe because the option of taking up this contract is not optional and as ALL insurers penalise in this way it makes it unfair?Why? Its a company set up to make money, and you've agreed to the conditions, I don't see how anyone doesn't understand this.
If we as the consumer could choose to take this contract or not then it would be a different matter IMO.
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