Car insurance cancellation fees

[Olivera]

An insurer that could be described as 'in a state of flux' has charged me the following car insurance cancellation fees:

POLICY ISSUE FEE £55
BROKERAGE FEE £48.29
CANCELLATION FEE £35

Only the £35 cancellation fee is mentioned in the policy handbook. Have I been diddled?

[irc]

Olivera said:

An insurer that could be described as 'in a state of flux' has charged me the following car insurance cancellation fees:

POLICY ISSUE FEE £55
BROKERAGE FEE £48.29
CANCELLATION FEE £35

Only the £35 cancellation fee is mentioned in the policy handbook. Have I been diddled?

A broker. So are you dealing with separate parties? The insurer whose cancellation fee is £35 and the broker who charges the other two fees. Presumably mentioned in their T and Cs.

Edited by irc on Tuesday 7th October 08:52

[alscar]

Olivera said:

An insurer that could be described as 'in a state of flux' has charged me the following car insurance cancellation fees:

POLICY ISSUE FEE £55
BROKERAGE FEE £48.29
CANCELLATION FEE £35

Only the £35 cancellation fee is mentioned in the policy handbook. Have I been diddled?

As a broker ( not Insurer ) those 3 items should all be in their T and C’s as advised previously to you.
The only one that looks odd is the brokerage fee in so much as it’s the Insurer that pays them brokerage so they are in effect “double dipping.”
Whether this is within the rules I know not.
I use a ( different )broker for car , house and pmi insurance and have never paid them any form of brokerage fee.

[James_N]

I took out learner insurance for our lad when he was learning to drive. 2 months later, he passed his test, and as per the terms and conditions, the learner policy becomes void. I had to pay a £95 cancellation fee (on a policy that was only £230 odd!). They said it was in the terms and conditions but annoying that I had to pay that, when the policy became void anyway!

Bloody con.

[BertBert]

alscar said:

As a broker ( not Insurer ) those 3 items should all be in their T and C s as advised previously to you.
The only one that looks odd is the brokerage fee in so much as it s the Insurer that pays them brokerage so they are in effect double dipping.
Whether this is within the rules I know not.
I use a ( different )broker for car , house and pmi insurance and have never paid them any form of brokerage fee.

Presumably the insurer who has paid the broker their commission for the business (brokerage fee) have a clause with the broker to return that fee to them if the policy is cancelled. So the broker charges the customer that otherwise they've done the work for free. Obviously it would need to be in their terms and conditions.

[Relli]

James_N said:

I took out learner insurance for our lad when he was learning to drive. 2 months later, he passed his test, and as per the terms and conditions, the learner policy becomes void. I had to pay a £95 cancellation fee (on a policy that was only £230 odd!). They said it was in the terms and conditions but annoying that I had to pay that, when the policy became void anyway!

Bloody con.

It's not a con though is it? Congrats to your son on passing his test, but you knew it must have been likely he passes his test soon, given that it's generally a couple of months to book a test in these days

Plus I don't think you HAD to cancel the policy, i.e. you're saying they made you cancel it? I think you could have just let it lapse.

[ozzuk]

No idea if this still works, but old trick was always finding something they wouldn't insure and hey presto a full pro rata refund. Not just word of mouth (well is from me) as I did this previously - looked up a minibus on ebay, got the plate, asked them to insure .

[Colonel Cupcake]

James_N said:

I took out learner insurance for our lad when he was learning to drive. 2 months later, he passed his test, and as per the terms and conditions, the learner policy becomes void. I had to pay a £95 cancellation fee (on a policy that was only £230 odd!). They said it was in the terms and conditions but annoying that I had to pay that, when the policy became void anyway!

Bloody con.

If the policy ends on your son passing his test, there would be no need for you to cancel, would there?

[alscar]

BertBert said:

Presumably the insurer who has paid the broker their commission for the business (brokerage fee) have a clause with the broker to return that fee to them if the policy is cancelled. So the broker charges the customer that otherwise they've done the work for free. Obviously it would need to be in their terms and conditions.

Fair point although not sure how in the same transaction they could also justify another policy issuance fee.
Perhaps all is clear in their T and C.