Insurance Broker Misbehaving

[chirpychippy]

This is not a DIY related post, but I am hoping that the intelligent beings on this forum could give guidance.

My Daughters car insurance renewal became due on the 7th of April, she has had her car insured with the same broker for the past two years and went through the automatic renewal process.

She was notified of the 14 day cooling off period should she wish to cancel without penalty, she didn't.

On the 22nd of April she received a letter from the broker "letter dated 20th April" that she had failed the credit check and that her policy had been cancelled with a time on cover charge of £1000.00.

To my mind they waited till the last possible day of the cooling off period to carry out the credit check and then send a letter advising knowing she would receive it after the cooling off period and effectively trapping her into a time in cover charge.

I think this is a form of entrapment albeit entrapment is not the correct word.

Insurance Ombudsman ??

Thank you in advance.

 

[securespark]

All I can say is that usually, you get the paperwork for insurance renewals a while before the renewal date so that you can make a decision about whether to stick or move.

Similarly, if there is a credit check to be carried out, that would be done ahead of time.

It does appear to me that something fishy is going on.

But would you have to exhaust the complaints process with the broker before going to the ombudsman?

Start by stopping the clock on that £1000 charge by making your complaint in writing to the broker.

Explain you want your complaint investigating and that if you are unhappy with the outcome, you will be referring it to the ombudsman.

This lets them know you are serious.

 

[Notch7]

This is not a DIY related post, but I am hoping that the intelligent beings on this forum could give guidance.

My Daughters car insurance renewal became due on the 7th of April, she has had her car insured with the same broker for the past two years and went through the automatic renewal process.

She was notified of the 14 day cooling off period should she wish to cancel without penalty, she didn't.

On the 22nd of April she received a letter from the broker "letter dated 20th April" that she had failed the credit check and that her policy had been cancelled with a time on cover charge of £1000.00.

To my mind they waited till the last possible day of the cooling off period to carry out the credit check and then send a letter advising knowing she would receive it after the cooling off period and effectively trapping her into a time in cover charge.

I think this is a form of entrapment albeit entrapment is not the correct word.

Insurance Ombudsman ??

Thank you in advance.

It sounds totally wrong, on the face of it.
I suppose if it's something that could be legally acceptable, then it may depend on the terms and conditions.

Maybe Motorbiking will see the post and comment from a legal perspective.

 

[conny]

If the payments were being paid monthly I could understand the credit check. But surely these would need to be done before the renewal came into force?
Having said that, my insurance with a certain Automobile Association was due up on 18th April and I contacted them 3 weeks prior to this, (when the renewal notice came), that I would not be renewing with them. Despite this I got more than 6 reminders it was due right up until the date of renewal. I then got reminders that it had not been renewed and I was therefore no longer insured. The final letter came on the 29th of April reminding me it had not been renewed but the odd thing was the letter was dated April 1st That was 17 days before it was even due!

 

[motorbiking]

She’d have to review the terms and conditions to see. But you need to check, if that £1k fee included any penalty or commissions. It sounds like a lot for 2ish weeks insurance. Is there a reason you can think of as to why she is no longer credit worthy? Can she pay the full amount or finance it? Did they give the offer of pay in full?

You can argue that the cancellation fee is unreasonable and ask them to waive it. Warn them that if they refuse, you will refer to the ombudsman.

 

[chirpychippy]

Thank you for your replies.

The insurance has been paid on direct debit and would if continued on direct debit. The Broker changed their financer from Debenhams to a company I can't recall the name of and it was with this new financer that her Credit Check failed.

I recently took out a contract hire van and had a credit check via the broker whom gave me the third degree for my income and expenditure before carrying out the check. I also received a letter from Hitachi asking if I had agreed to a Credit Check "probably Fraud related". However my Daughters broker didn't ask for an income and expenditure evaluation, so by comparison, on what basis could they evaluate her credit worthiness.

I have taken your advice and I will be writing to my Daughter's Broker on her behalf to lodge a formal complaint. I will make sure my Daughter notifies them and gives authority for this course of action.

Personally I think it stinks. And it's my Daughter so I'm super protective of her.

 

[conny]

Is she a young driver with little experience? Do she drive an expensive car? Does she have any no claims discount? Is her premium quite high?
There are a lot of factors to take into consideration as to why they did a credit check but to not notify you until after you assumed the insurance had started is totally wrong in my opinion, and for the letter to be dated so close to the start date smacks of a dubious broker. I would certainly not pay the £1,000 fee and look for another insurance company.

 

[johnny2007]

Careful now, it seems they've put a mark on your daughter's record about insurance being cancelled.
They shouldn't do this because of a failed credit check, but they do.
If you go to another insurance you will need to declare that you had insurance cancelled and your premium will be extortionate, if they insure you.
So check with them before going elsewhere.
By the book, if you've always paid and renewing with the same company, they shouldn't cancel the insurance, even if the direct debit failed.
They should give you the opportunity to pay by other means.
When I say you, i mean your daughter.

 

[ReganAndCarter]

What exactly is she insuring that costs £1000 for 13 days cover? It's not her fault if the insurance co were slow to do their checks. I would imagine, though I don't know for certain, that she entered into a contract with the insurance co. They have broken their side of the deal, but no doubt there will be weasel words in the Ts & Cs somewhere. Sounds like sharp practice, and I would definitely be onto the ombudsman for the sum of money she's lost.

 

[KenGMac]

The Credit check being [shall I call it] late is odd in that if you use a web comparison site, the top three companies will then and there undertake a credit check, a [so called] soft check that is the type that will not affect your present credit rating.

Now, the last time I was on a comparison site, it was about a month prior to my renewal, the next day i was messaged by Experian to advise of a soft check being undertaken of my credit rating. by at least three insurers.

I do not deal with this end of insurance but what i do know is that if you apply to any insurer there will be a credit check as above. whether the payment of the premium is a lump sum or monthly.

As an aside the "cooling of period" is for the Customer NOT the Broker???

As for the £ 1,000 at such short notice, No that is simply not on, a direct complaint to them would be in order, make what is called in insurance terms an "expression of dissatisfaction" which because the broker is governed by insurance "Rules" has to be handled in specific ways and within tight time frames.

Another consideration? if your Daughter was going with the same insurer, i am sure that a call to them, they have in effect lost business and see what they have to say?

Ken.

 

[chirpychippy]

Having managed to have a verbal conversation with my Daughter, not WhatsApp or Text message which is achievement in itself .

This is how it went....
Renewal time, my Daughter did the comparison check on line adding her girlfriend as a named driver. Low and behold she obtains a quotation from her current insurer via her current broker for £79 per month, her new renewal monthly premium quotation was £159 per month.

She rang the broker and requested that her girlfriend be added to the renewal policy as a named driver and highlighted that their on line quotation was considerably cheaper and could they match it.

The answer was that they couldn't add her as a named driver at the renewal stage and that the existing policy would have to be cancelled on the renewal date and a new policy with her girlfriend would commence on the renewal date, but with a deposit of £400, which she couldn't afford.

Therefore she carried on with the extortionate renewal with the view of adding her girlfriend at a later date.

So policy renewed and all renewal documents emailed to my Daughter through their portal.

Then on the 14th day or her cooling off period the broker sends an email advising that the finance company have declined her. On the same day they follow this up with a letter of the same content advising that she has 7 days to respond to make payment or the policy may be cancelled.

Incidentally the email was blocked as a security threat due to the nature of her job.

My Daughter rang the broker to explain that she couldn't afford to pay in one lump sum and to enquire why it had taken so long to carry out the "Credit Check"?? No answer!! She then informed the Broker that she would be cancelling the Policy, so as not have a black mark against her name. At this point the Broker advised her that the time on cover charge was £1000, I think she probably burst into tears at that point or worse. She has received an email today advising the time on cover charge has been reduced to £345 and has 21days to pay before a recovery agency is contacted.

I still think this is coercive on their part?

 

[securespark]

Yes.

Make a complaint in writing asap.

But of course your daughter will need continuous insurance for her car, so I'm not sure how you will arrange that.

If the complaint goes to the ombudsman, it generally takes 4-6 months, IME.

 

[johnny2007]

Just a suggestion: could you pay the annual premium yourself and get your daughter to set up a standing order to repay you for the next 12 months?
You don't need to reply, we don't want to know your finances.
It's just a suggestion to get your daughter on the road and the insurance muzzled up.

 

[chirpychippy]

I would of paid it in a heart beat, but she is proud and won't ask.

 

[johnny2007]

I would of paid it in a heart beat, but she is proud and won't ask.

Don't let her ask, just tell her this is what it's going to happen.
You're not giving her the money, you're lending it, so no reason to feel shy.
If it makes her feel better, sign a piece of paper making it official.
I know you don't need it, but it might make her feel less proud.