Letting a contents insurance policy roll after moving out?
Discussion
I'm just about to move home for the first time in 20 years, going from a flat to a house. I've only previously needed contents insurance at the flat and the policy is due to end early August. For reasons, I'm not going with the existing insurer for the new place and have already purchased a buildings + contents policy that's far better value elsewhere - this is ready to commence on completion date (new build purchase so no need to insure from exchange date).
My query is this - the old contents policy will cost me more to cancel than just letting it 'run its course' to the end date in August - but given that I'm moving next Thurs am I likely to run into any issues if I don't cancel with the current insurer (particularly as it's contents-only and they're not insuring anything relating to the building)?
It feels like I probably should let them know I'm moving out but they'll charge an admin fee and as there was a small claim last year there wouldn't be any pro-rata credit (which would probably have been less than the admin fee anyway). Auto-renewal is off.
Do I cancel and cop the fee or can I just leave it and let it lapse at the beginning of Aug?
My query is this - the old contents policy will cost me more to cancel than just letting it 'run its course' to the end date in August - but given that I'm moving next Thurs am I likely to run into any issues if I don't cancel with the current insurer (particularly as it's contents-only and they're not insuring anything relating to the building)?
It feels like I probably should let them know I'm moving out but they'll charge an admin fee and as there was a small claim last year there wouldn't be any pro-rata credit (which would probably have been less than the admin fee anyway). Auto-renewal is off.
Do I cancel and cop the fee or can I just leave it and let it lapse at the beginning of Aug?
alscar said:
The premium would have taken into account the previous loss when you took the policy out so if you cancel you should get a pro rata return of premium for the 2 months ie you have used 10 months worth so you get 2 months back.
Less the admin fee if that s applicable.
Thanks, as mentioned there was a claim late last year that means they won't pro-rate any refund. Had there been no claim they would have (minus the £50 admin fee).Less the admin fee if that s applicable.
They shouldn't charge you 'above premium' to cancel the policy, so if the cost to cancel, less the refund (likely no refund as you've claimed) takes the total cost above the premium price of the policy then they shouldn't be charging you a cancellation fee.
Its best practice to let your insurer know that you no longer have an 'interest' in the property after what ever date you move out and explain the situation.
My understanding of the above is standard practice with insurance.
Its best practice to let your insurer know that you no longer have an 'interest' in the property after what ever date you move out and explain the situation.
My understanding of the above is standard practice with insurance.
Funk said:
alscar said:
The premium would have taken into account the previous loss when you took the policy out so if you cancel you should get a pro rata return of premium for the 2 months ie you have used 10 months worth so you get 2 months back.
Less the admin fee if that s applicable.
Thanks, as mentioned there was a claim late last year that means they won't pro-rate any refund. Had there been no claim they would have (minus the £50 admin fee).Less the admin fee if that s applicable.
In which case if no refund of unearned premium ( I assume that’s in their t and c ?) and they are intent on charging an admin fee I would indeed forget to cancel.
Funk said:
The remaining cost of the policy is about £45 (I paid upfront in full last Aug, I won't get any back) and the admin fee is £50. Unless it's going to cause a problem I'd rather not spend £50 for nothing. It just seems pointless.
I really doubt you'll be charged more than keeping it going, although I've had exactly this situation in the past.https://www.financial-ombudsman.org.uk/files/2889/...
Financial Ombudsman Service said:
The FSA statement specifically refers to terms that charge policyholders a disproportionately large sum if they do not fulfil their obligations under a contract, or if they cancel it. We share the view that giving consumers the right to cancel – and then penalising them financially for exercising that right – is likely to be unenforceable in law, as well as unfair and unreasonable.
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