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Motor insurance policy.

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Motor insurance policy.

Postby smuge » Sat Aug 30, 2014 2:13 pm

A motor insurance policy is cancelled 3 days after paying deposit on-line. Insurance company demand more money to cover the cancellation fee. Either pay-up withing 7 days or will be assumed to be taken from the card used to pay the initial deposit.

Is there anything that can be said to prevent such an assumption until dispute is resolved?
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Re: Motor insurance policy.

Postby Hairyloon » Sat Aug 30, 2014 2:29 pm

Quote the law to the insurance company and report them to the regulator.
Contact the credit card company and ask them not to allow the transaction.
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Re: Motor insurance policy.

Postby smuge » Sat Aug 30, 2014 2:41 pm

Hairyloon wrote:Quote the law to the insurance company and report them to the regulator.
Contact the credit card company and ask them not to allow the transaction.


Thanks, Hairy. :D
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Re: Motor insurance policy.

Postby Slartibartfast » Sat Aug 30, 2014 6:45 pm

Hairyloon wrote:Quote the law to the insurance company and report them to the regulator.


Are you quite sure that motor insurance policies are eligible for distance selling regs? Because I am not.
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Re: Motor insurance policy.

Postby Hairyloon » Sun Aug 31, 2014 9:49 am

Not quite sure, but why wouldn't they be?
I'm pretty sure we've had this discussion before...
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Re: Motor insurance policy.

Postby Slartibartfast » Sun Aug 31, 2014 8:26 pm

I believe that The Financial Services (Distance Marketing) Regulations 2004 apply to insurance, and that a reasonable cancellation fee is permissible.

A useful discussion at moneysavingexpert here : http://forums.moneysavingexpert.com/sho ... p?t=893319 - the final page has some Financial Ombudsman guidance about how 'reasonable' should be interpreted.
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Re: Motor insurance policy.

Postby Hairyloon » Sun Aug 31, 2014 9:26 pm

Slartibartfast wrote:I believe that The Financial Services (Distance Marketing) Regulations 2004 apply to insurance...

Do you mean the Financial Services (Distance Marketing) Regulations 2004 that I directed OP to look at, or do you mean some other Financial Services (Distance Marketing) Regulations 2004?
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Re: Motor insurance policy.

Postby Slartibartfast » Sun Aug 31, 2014 10:14 pm

Hairyloon wrote:
Slartibartfast wrote:I believe that The Financial Services (Distance Marketing) Regulations 2004 apply to insurance...

Do you mean the Financial Services (Distance Marketing) Regulations 2004 that I directed OP to look at, or do you mean some other Financial Services (Distance Marketing) Regulations 2004?

You linked directly to s9 of the Act, which explains how cancellations could be made, and you then said "report them to the regulator". To a casual reader, this would plainly seem as if the insurance company were prohibited from charging a cancellation fee.

I do not think that accurately reflects the legal position.
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Re: Motor insurance policy.

Postby Hairyloon » Sun Aug 31, 2014 11:47 pm

Slartibartfast wrote:You linked directly to s9 of the Act, which explains how cancellations could be made, and you then said "report them to the regulator". To a casual reader, this would plainly seem as if the insurance company were prohibited from charging a cancellation fee.

I made the rash assumption that OP was not a casual reader of his own circumstance and that he will have noticed that the cancellation fee was on top of a deposit.
Unless the deposit is so small that it is not worth taking it, this would seem to put to cancellation fee well above anything reasonable.
I do not think that accurately reflects the legal position.

I am not convinced that the Act allows a cancellation fee. Do you want to reference the relevant section?
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Re: Motor insurance policy.

Postby Slartibartfast » Mon Sep 01, 2014 12:35 am

Hairyloon wrote:
Slartibartfast wrote:
I do not think that accurately reflects the legal position.

I am not convinced that the Act allows a cancellation fee. Do you want to reference the relevant section?


It is not necessary to for any legislation to be enacted to 'allow' a cancellation fee within an insurance contract. In UK law, anything which is not prohibited is permitted.

According to the Ombudsman guidance pasted at MSE (link earlier), unreasonable cancellation fees are contrary to Unfair Terms in Consumer Contract Regulations 1999. That MSE topic lists the fees for most of the major UK insurers, so Smuge could look and see if his friend is being asked to pay markedly more.
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