House contents.. can they charge what they want to cancel?

[Cg_Girl]

A little while ago i called in to my bank, whilst there they asked me about house contents insurance and gave me a good quote.. cover is the same as what i have now, if not better and less than half of what i am paying now..

my problem is, when i rung to try and cancel, i expected there might be an early cancellation fee, around £20-25 ish, but they were so rude and un helpful, they then said it would cost me £90 if i wanted to get out early..

When the bank rung me back to see if i could go ahead even they were shocked and said they had never encountered that kind of fee before...


Can they charge what they want?..

 

[neil_g]

what does it say in your terms?

 

[Spuff]

Do you pay monthly and there is an element of the remaining contract in there too?

 

[Cg_Girl]

what does it say in your terms?

I'm just trying to fish them out now, i don't remember anything so drastic but i guess i hold my hands up and admit i do skim read the small print and yesmy biggest mistake....

Do you pay monthly and there is an element of the remaining contract in there too?

Yes i do pay monthly and it was within the first 3 months of a new contract, i guess i just didn't expect so much, i know obviously with phones and stuff you have the item with you do i can see that, but with this i just assumed it would be like i say around £25, admin type charge

 

[Gremlin]

I think you will find that they take a percentage of the annual premium if you cancel, something like 75% (may vary from company to company) to cover admin cost etc.
So they are not actually charging you to cancel, but obviously you will stop the payments so they need the extra up front.
Not right in my mind, but they all have us, my car company increased the premium when I removed my ex as a named driver :bang: and charge an admin cost when I change cars :bang:

 

[MartynK]

A lot of insurance policies are on a 12 month contract. They may allow monthly or quarterly payments, but that doesn't change the duration of the policy. The terms and conditions, including any penalties for early cancellation, should all be in the policy documentation.

It should be an easy calculation. Will you still save money by paying the £90 cancellation fee, and taking the cover offered by the bank or not? If you're not going to gain anything by this, just bite the bullet and get another quote through the bank next time. It's always a good idea to get several quotes before renewing anyway. The days when insurers rewarded loyalty are long gone, and they love 'inertia' renewals!

 

[Cg_Girl]

I think you will find that they take a percentage of the annual premium if you cancel, something like 75% (may vary from company to company) to cover admin cost etc.
So they are not actually charging you to cancel, but obviously you will stop the payments so they need the extra up front.
Not right in my mind but they all have us, my car company increased the premium when I removed my ex as a named driver :bang: and charge an admin cost when I change cars :bang:

That does make sense Ingrid.. I agree it's not right, especially the car Insurance, i was the same when i took my ex off mine, i actually kept him on for ages just because i didn't want to pay the charges, but when i changed my car i got the whole thing adjusted, It's the same with private rent renewal, £50 every 6 months, must be expensive paper they use!

A lot of insurance policies are on a 12 month contract. They may allow monthly or quarterly payments, but that doesn't change the duration of the policy. The terms and conditions, including any penalties for early cancellation, should all be in the policy documentation.

It should be an easy calculation. Will you still save money by paying the £90 cancellation fee, and taking the cover offered by the bank or not? If you're not going to gain anything by this, just bite the bullet and get another quote through the bank next time. It's always a good idea to get several quotes before renewing anyway. The days when insurers rewarded loyalty are long gone, and they love 'inertia' renewals!

To be honest yes i probably would still save money, i just don't have the £90 upfront.

I'll just have to wait till after Christmas and change then and make sure i look at all small prints a bit bettter too

 

[BRASH]

Do you wanna sub??

 

[MartynK]

To be honest yes i probably would still save money, i just don't have the £90 upfront.

I'll just have to wait till after Christmas and change then and make sure i look at all small prints a bit bettter too

Don't stress. I guess just about all of us are guilty of not reading the fine print properly, or at all!

 

[Cg_Girl]

Do you wanna sub??

Awww you're a sweetie really aren't you

Don't stress. I guess just about all of us are guilty of not reading the fine print properly, or at all!

With things like yes, it's just sign and get on with it, annoying when you then get offered it so much cheaper lol

 

[Steve Smith]

When I changed my life insurance, the new insurer told me to just cancel the direct debit and that there was no requirement to tell the old insurer that you are cancelling (I did though).


Steve.

 

[Craig1912]

When I changed my life insurance, the new insurer told me to just cancel the direct debit and that there was no requirement to tell the old insurer that you are cancelling (I did though). Steve.

Different type of contract covered by different regs. house and motor are short term and generally annual contracts and the insurer is within their rights to charge you for the whole year. Most don't though and charge a cancellation fee.

 

[neil_g]

When I changed my life insurance, the new insurer told me to just cancel the direct debit and that there was no requirement to tell the old insurer that you are cancelling (I did though).


Steve.

one way to wreck your credit rating (a lot of monthly payments are done via credit providers) and/or get the repo men round i guess :shrug:

 

[onomatopoeia]

Yes i do pay monthly and it was within the first 3 months of a new contract, i guess i just didn't expect so much, i know obviously with phones and stuff you have the item with you do i can see that, but with this i just assumed it would be like i say around £25, admin type charge

Insurance is not generally refunded pro rata if you cancel early. Since you are paying monthly you may not have paid the difference between the total cost of the policy and the refund amount at the time of cancellation, so that would have to be made up in addition to any "cancellation charge", hence the higher total cost.

 

[Gremlin]

When I changed my life insurance, the new insurer told me to just cancel the direct debit and that there was no requirement to tell the old insurer that you are cancelling (I did though).
Steve.

Different type of contract covered by different regs. .

Strange isn't it, when I worked in insurance many years ago it was Life Assurance and as Craig so rightly said a totally different thing, you can stop them but often get nothing back when you do
Difference in name is because insurance is for something might happen, assurance means it defo will at some time