Comments on: Insurance rip off in the Uk?

By: ascoile

ascoile — Thu, 26 Nov 2009 06:17:53 +0000

Welcome to the real world. It is a sad fact but when the insurance was taken out this would have been in the small print. If he signed then he is stuck.
It gets worse, because the insurance companies talk to each other and share databases, to "prevent fraud" of course this will be shared as well and if not paid will make further insurance difficult.
Whether or not you pay them is up to you.

One thing is for sure, he wil be reading small print very carefully in future.

By: Steph j

Steph j — Thu, 26 Nov 2009 06:17:53 +0000

Read the small print in the policy, there is usually a fee to cancel if you are paying monthly.

Rip off though, I agree.

By: Jill Pinky

Jill Pinky — Thu, 26 Nov 2009 06:17:53 +0000

I would certainly challenge the insurance company and insist that they give you a break down of why they are charging such an exorbitant amount.

By: Sammy

Sammy — Thu, 26 Nov 2009 06:17:53 +0000

sorry but that is as standard in 99% of insurance. SMALL PRINT!

By: Tony R

Tony R — Thu, 26 Nov 2009 06:17:53 +0000

I would like to say " fight them all the way " but it is near impossible to win against such a force that has laws of its own, I would suggest you try and "suspend " it and maybe put on another car later, if that does not work take out an insurance with some one else next time and put the name of the company on the web so we can all see it, Oh and you could inform your AA or RAC about them as well.

By: welcome news

welcome news — Thu, 26 Nov 2009 06:17:53 +0000

Assuming your son paid the full insurance premium then: was this fee charged by your insurance intermediary?

If so you should look for their Initial Disclosure Document which they should have given you when your son took out the policy and see what is states about charges. The information may be provided on their terms of business.

You MAY be able to argue that this amount is a penalty and as such unenforcable – similar to how the banks are having to refund charges.

I must admit £95 seems a bit steep – the highest I knew previously was £55.00. Did your son take out a policy with a cashback that had to be refunded on cancellation?

Do you wish to name and shame? You may put in a complaint against the insurer/ advisor – full details were provided when you took out the policy and if you do not receive a satisfactory conclusion request the FOS to take up the complaint – the insurer/ broker is bound by their decision.

For your information the rules about fees are found on the FSA website:http://fsahandbook.info/FSA/html/handbook/ICOB/2/10

By: BullEyed

BullEyed — Thu, 26 Nov 2009 06:17:53 +0000

Insurance companies ripping someone off?…Thats a new one….NOT!!!

Insurance "Companies" is no longer the case it more "Company".. All your lives before them on a computer screen…At Their mercy every year when we "shop Around" for a quote becuse the law says we HAVE to deal with them if we want to drive..

They charge what they want and never miss a chance to charge "Admin fees" that are basically for pressing a few buttons and maybe a postage stamp.

You know what would be great if one year no one renewed their insurance in protest…
Watch them Quote you Happy with pleasure.

By: drivingmedaft

drivingmedaft — Thu, 26 Nov 2009 06:17:53 +0000

Similar to bank chrages they have to give break down of costs there is good web page on it at GMTV for banks write to them making changes to the wording to cover fact it’s insurance!!
If it is not in small print it is not chargeable simple really!!
Go get them quick threat of the insurance ombudsman and trading standards should do it!!

By: gynmedic

gynmedic — Thu, 26 Nov 2009 06:17:53 +0000

It would have been a good idea for you to publish the name of the Insurer, then we could all avoid them! Wasn’t Budget was it?

Yes of course it’s a rip off but, as everyone says, it’s in the small print so you have to go with it.

You seem sure it’s not mentioned in the policy document. If it really isn’t then, make a complaint to the Financial Servies Ombudsman. They will investigate for you, and if you are right, you should get a refund.

Good Luck.

By: Fred C

Fred C — Thu, 26 Nov 2009 06:17:53 +0000

There is a charge as a policy is cancelled "short-rate". The amount of the charge varies from company to company, and jurisdiction to jurisdiction. In Manitoba, for instance, the charge is 7% at the start of the policy, and goes down a fraction of a percent for each day the policy is in force. For example, a $1500.00 policy cancelled the second day would cost about $105.00 in cancellation penalty, but it would be about $53.00 after 6 months, etc. Your penalty sounds exessive, but, if it is anywhere on the paperwork, in an information pamphlet, or otherwise available, is probably something you cannot fight.

By: fwh

fwh — Thu, 26 Nov 2009 06:17:53 +0000

You do not say how long the policy had been in force or if he paid in full at the start or by monthly instalments.

If for example he had the policy for 3 months and was paying by means of 12 instalments then he may not have paid the minimum. Reading your comments it seems that might be the case.

If he paid in full then just leave the policy in place until it runs out. There is no rule that says you have to cancel it and no charges apply would apply in that case.

Should he obtain another car before it expired then he would simply transfer it.

By: Broker Man

Broker Man — Thu, 26 Nov 2009 06:17:53 +0000

You need to check the Keyfacts document issued by the insurance arranger/broker. If this is not stated when the Terms of Business was issued at the time of purchase, then it is not legal. You would have grounds to complain to the Financial Ombudsman Service (FOS). However, you will need to follow the complaints procedure that is in force with your Son’s end provider first.

By: Colin M

Colin M — Thu, 26 Nov 2009 06:17:53 +0000

Was the policy to be paid for by monthly instalments?
In that case, as the premium has to be paid in full at the outset, what happens in effect is that the insurance company lends you the money to pay it up front, and you then have to repay them that loan by monthly instalments. They are entitled to expect their loan to be repaid.

By: Oracle

Oracle — Thu, 26 Nov 2009 06:17:53 +0000

Cancellation of a policy in the first 12 months usually incurs what are called "short period" rates. If there had been a claim in the period of insurance, the full annual premium may have been retained by the insurer. After the first full year of cover, pro-rata refunds (less a cancellation charge [usually between £10-£20]) are usually given, subject to no claims in the current period of insurance.

When the policy was taken out, the insurer should’ve issued you with a Terms of Business document (new FSA regulations) which detail all fees/charges.

You have no official recourse, provided you were given a copy of the TOB at inception or quote stage.

By: Bealzebub

Bealzebub — Thu, 26 Nov 2009 06:17:53 +0000

Absolute dribble, I canceled my policy last year with 4 months left and didn’t get charged a penny. They can ask it but if you order them to freeze the policy and speak to trading standards, I’m pretty sure they will not be permitted to demand this charge.

6 years ago the law was changed and a loophole formed that allowed companies to write unlawful charges into a policy simply as a precaution to try to prevent these situations occuring, this in itself is not unlawful, but to try to implement them is. It’s the same if you sign a contract to order somebodies execution without the queens consent, although it is all in the contract, if you then didn’t pay the hit-man, he could not enforce this contract in the courts (although you would probably be on his list!!).

By: lofty76

lofty76 — Thu, 26 Nov 2009 06:17:53 +0000

Why didn’t he just keep the policy going and transfer it to his next car?, even if the policy ran out before he got a new car the no claims discount would have been maintained and would probably have saved him more in the long run.

By: skippy2k2005

skippy2k2005 — Thu, 26 Nov 2009 06:17:53 +0000

It does state that but you have to really be a legal expert to understand it.

If you don’t pay up they can stop you getting car insurance in the future a kind of black listing.

It’s harsh I know but thats the financial companies for you.

Why doesn’t he continue to pay, if he hasn’t got much time left on the policy.

Therefore he would get an no-claims bonus, and cheap car insurance in the future.