Car insurance – daylight robbery!

Just a vent really – ripoff Britain, etc.

Not just the cost nowadays – having transferred my son to a full policy after he passed his test (£1485) and my 20yo daughter’s renewal, admittedly with a small bump last year going from £800 to £1050 – today I’ve had a letter informing me I owe £127 for cancelling my son’s learner policy.

It’s all written in various 35 page documents, including one that says that further T&C’s are available on the various insurer’s websites that the broker (Sterling) uses….. but there’s no transparency in how costs are calculated. Caveat emptor, etc. but posting to vent and also to warn others – particularly learners, might be worth doing shorter policies to avoid this.

His policy was £220

There’s a non-refundable arrangement admin fee of £75 (for what IDK, it’s all on line now)

There’s interest because I paid monthly of about £35

In total the yearly cost was £330.

I’ve paid a deposit for first month plus monthly instalments, totalling £175.

Because he passed after 4 months and 4 days, the T&C’s say I have to pay for 70% of the policy, and get 30% back. You’d think that would be 30% of £330? Not a chance. The £75 arrangement fee’s not part of that. And the interest – nope you have to pay 70% of the interest too. So I only get 30% of the £220 plus interest back – maybe £70-75?

Nope, wrong again.

Because they’re a broker they retain their commission on the whole policy so take a deduction out of that.

And then the bit that is driving me to fume over this – a £40 cancellation fee buried in website T&C’s.

I’ve had 4 months and 4 days out of the policy and they’re going to charge me £302 of the £330 total. We charge you £70% if you cancel after 4 months but somehow I’m paying 91.5% of the total cost.

And a **** £75 arrangement fee, commission on the policy, and a £40 cancellation admin that took about 3 mins “OK, he’s passed so your policy is now voided”

I feel like I’m paying the broker 3x for the same thing

(and as a final rub it in) – “if you don’t want to pay for cancelling, if you transfer to a full policy with us, we’ll credit the full amount of the unused policy to the new one”

“oh great, how much would that be?”

“£2480”

Yeah, but reality is nobody really reads the Ts and Cs online when doing stuff, the companies know this, hence why you get 34 page generic documents sent to you at the push of a button.

Insurance has been a bit of a con for years now, there used to be a statement about insurance going up because of the cost of Storm whatever, nowadays it just goes up for whatever they want to charge.

it wasn’t even that the 34 page document had the info, it contained info telling you to go to the websites where there was another 34 page document….Whatever happened to key facts boxes? Are they not needed on insurance, it’s a financial product?

And even then, contracts should be ‘fair’ – as I pointed out to the cancellation woman I spoke to earlier, you can’t just write any old stuff down and then just point to it. Is £40 on top of £75 admin ‘fair’? If they’d said £200 cancellation then I bet it wouldn’t be, they’re stretching it as far as they think they can I guess.

I’ve paid the £127 by credit card, I’ve half a mind to then raise as a dispute with the CC company and see what they say

It’s not worth the stress, put it in the rear view mirror and move on, otherwise you’ll just be paying the money and stressing yourself out.

He’s passed his test so well done for doing it so quickly. And £300 isn’t that much money in these times.

Now the real fun with insurance starts – prepare to properly get your arse spanked!! 🤣🤣

He’s passed his test so well done for doing it so quickly. And £300 isn’t that much money in these times.

Now the real fun with insurance starts – prepare to properly get your arse spanked!!

Yep – as per the OP, £330 learner policy became £1485 the moment he passed!

The arrangement/admin fee as a significant sum has only started appearing in the last few years afaiaa. It’s a bit of sharp practice that means you can’t actually withdraw from a financial arrangement without penalty, even though you’ve a statutory right to be able to do so. It separates a significant part of what you’ve paid from the “financial product” and it’s utter bullshit.

£300 isn’t that much money in these times

It bloody well is, though I’m happy you’re apparently able to disregard £300!

Yep. Although technically the cancellation fee isn’t part of the actual cost I’ll have paid £115 in fees for a ‘product’ that was £330

The cancellation lady did point out actually I haven’t paid 302/330 – I’ve paid 262/330 – and the £40 is a new cost.

Which made me feel way better.

Now the real fun with insurance starts – prepare to properly get your arse spanked!!

Exactly.

Just re-read the post and spotted this…

having transferred my son to a full policy after he passed his test (£1485)

…if he’s got fully comp on his own car and own policy for £1485 you’ve got a bargain. Have you checked the T&Cs though! 🤣

I take it that’s with a black-box.

I cancelled autoaid because the policy went autorenewal by default, they charged me say 30 quid on a 60 quidish policy.  I complained to autoaid the fee was disproportionate, 2 weeks cover effectively cost me 50% of the annual fee.

Autoaid complaints said all agreed by me, tough luck.

I then saw on autoaid website they are regulated by insurance ombudsmen, or fscs, one them anyway.  So I said I m complaining to regulatory body.

They refunded in full immediately.

It bloody well is, though I’m happy you’re apparently able to disregard £300!

In learner driver insurance it’s about as cheap as you’re going to get. At 55 with donkeys years of NCB all our cars are more than that per year.

Raise a complaint with the insurance ombudsman.
You may not get anywhere but I’m sure I read somewhere that it costs the insurers whenever someone raises an issue against them. You may not get a refund but at least you can cost them some money for no real benefit!

Whenever I read these threads I’m always amazed that as far I’m concerned, car insurance doesn’t seem that expensive for young drivers these days.  I passed my test in 2004, 3rd party only insurance on my 998cc J reg Fiesta was a few quid under £1000.

I take it that’s with a black-box.

Yep, and also me and Mum as named drivers. Which is true, not fronting, we both will drive it from time to time even if it’s just because it’s the last one on the drive and we need to nip for a pint of milk or whatever.

In learner driver insurance it’s about as cheap as you’re going to get. At 55 with donkeys years of NCB all our cars are more than that per year.

I don’t object to the cost of that insurance – in fact it’s bloody good – but it expired as soon as he passed and the complaint is all the (hidden, at best opaque and hard to find) fees that are charged for cancelling.

Whenever I read these threads I’m always amazed that as far I’m concerned, car insurance doesn’t seem that expensive for young drivers these days. I passed my test in 2004, 3rd party only insurance on my 998cc J reg Fiesta was a few quid under £1000.

oof! that would have had a 4-speed gearbox, no?

My first car was an 8 year old 8v Astra 1.3 (merit, I think)… I think it was about £800 TPF&F, that was in 1998.

I learned to drive in my mums 1.2 Nova saloon, with cool features like manual choke, hahah!

I passed my test in 2004, 3rd party only insurance on my 998cc J reg Fiesta was a few quid under £1000.

I had a company car for 3 years before being made redundant in 1999. Unfortunately had a small bump 6 months before I was made redundant. Bought myself an R reg Fiesta, aged 30, that one bump in 12 years meant that I had no NCD and it was c£850.

The real kicker is that I’d been made redundant from an insurance company after that stupid **** nodding dog took us over!

Ohhhh yesssss.

Was the learner policy a short term gig or full year?

Full year. But as a learner policy that is likely to be cancelled (and indeed is automatically voided by the insurer on passing, it wasn’t particularly a choice) I suggest it should be costed in and certainly not hidden away 2 large documents deep.

As I said in the OP

also to warn others – particularly learners, might be worth doing shorter policies to avoid this.

Did you enquire with the broker on cancellation fees or read the T&C’s? Could you have found a different policy with better terms or did you like most people go with the cheapest quote?

Rather than being negative why not celebrate that your son has passed his test so no more taxi service or expensive lessons?

Did you enquire with the broker on cancellation fees or read the T&C’s?

Is this an ironic post in which all the answers to your question are in fact covered in the screeds above that you haven’t read? In fairness, who wades through all the words, we all just scan for the bits we think are important – and miss the key bits but which would be useful if they were all listed in a single box somewhere obvious  😉

Whether I’m stupid for not reading the 70-odd pages that it was hidden in or not isn’t really the point, it’s that the costs are being moved more and more (as Johnners noted above) into these charges and admin fees so they aren’t part of the more legislated insurance part. And are out of line with actual costs – so I’m being ‘fined’* for something that is entirely predictable and I think should be part of the policy costs.

Rather than being negative why not celebrate that your son has passed his test so no more taxi service or expensive lessons?

And of course things aren’t mutually exclusive, I can be happy about passing and all that at the same time as being buggered off about being ripped off for ‘fees’.

* those who follow parking threads will possibly know I support penalty charges for theft of parking spots – partly the penalty for doing it but also the deterrent to stop them. I also therefore support some kind of penalty in general, to prevent people leaping from policy to policy every time a couple of quid saving comes up. Although still not sure that isn’t already covered by the non-refundable set up fee, when all the work is done, and/or the ‘cancel after 1/3 of the policy, we’re still keeping 70% of the premium)

To avoid anyone missing the Key Facts

Beware, there may be a penalty if you ‘cancel’ early as well as loss of a chunk of your premium – consider short term policies to avoid this.

Not happy about the way a financial services product is run?

Complain to company > get final response > go to FOS

Costs you nothing. Costs company £600 ish.

You might get something back, you might not.

I have – on two counts. Wording below

1/ the additional charge of £40 for cancellation is not made sufficiently clear in the policy documents, and is not a choice or an option to avoid – on a specific learner policy that automatically expires on the learner passing their test, I believe this should be clearly stated in the policy and in fact should be calculated as part of the cost of insurance, not added afterwards.

2/ On top of retaining your arrangement fee and your commission on the insurance I believe the £40 fee is not justified for the admin involved.

Make reference to the overall charge for the policy not being fair and reasonable.

Check which party (insurer or broker or is there a premium funder) is actually applying the various charges.

The £40 likely isn’t a policy charge, it’s a broker charge (you said it was in the website).

So, it sounds like the broker charged you 75 for setting up, 40 to cancel, and kept all their commission. Doesn’t sound particularly fair, but it’s up to you whether chasing it all up for 7/12 of (330 less the fees) is worth it.

The fees are probably in line with what the ombudsman says are reasonable. It’s how they’ve applied them that might not. Particularly for a type of insurance that would normally be expected to be short-term.

But hey, we all want cheap premiums, right? This is one of the results.

Full year. But as a learner policy that is likely to be cancelled (and indeed is automatically voided by the insurer on passing, it wasn’t particularly a choice) I suggest it should be costed in and certainly not hidden away 2 large documents deep.

I think that’s the key here. It’s nothing like me cancelling an annual policy. It’s temporary cover by its nature

I’m sure insurance companies are making heathy profits and they benefit from pay outs going up as it makes the market bigger. However it’s hard to deny that they must now be paying out more than they use to. Used car costs have gone up massively. More uninsured drivers. Plus there clearly is a competitive market for insurance. Although a downside to that market is hidden costs

Raise a complaint with the insurance ombudsman.
You may not get anywhere but I’m sure I read somewhere that it costs the insurers whenever someone raises an issue against them

exactly this.  Except be nastier.  Raise an individual complaint first to the insurance company for each misdemeanour. Email them separately in each instance. One for each scummy charge. Remind them in the emails that you are aware of the FOS process and that if a complaint is passed to them, they will be charged £750 for each complaint. Here’s the link to their charges.  It’s good to include this.

Let them then decide how to handle your complaints.  You might get something back.  Irrespective of the outcome shop then to the FOS anyway. Again one escalation per misdemeanour. Scum companies and their intrinsically evil employees who come up with this crap need to be kneecapped. Taking their cash is a great way to do this.

It’s nothing like me cancelling an annual policy. It’s temporary cover by its nature

This. Everyone hopes it’s not going to be a full year of being a learner. I suppose the OP might feel better if he considers the insurance cost against the alternative of expensive driving lessons 😉

I’m sure insurance companies are making heathy profits

Raise an individual complaint first to the insurance company

This seems to be about an insurance broker’s charges, not an insurance company.

They’ll still be regulated by the FOS and being a broker are likely to be a load smaller, so the impact of each complaint will be higher.

No, they’re regulated by the FCA and PRA.

I’m sure insurance companies are making heathy profits

That point was really about rising costs of motor insurance. But what I meant was the insurance industry which would include the broker.

@rich_s isn’t mediation still handled by the ombudsman in all cases?

@mattyfez yep 4 speed box and a manual choke!  Plenty of adventures had in that thing!

Full year. But as a learner policy that is likely to be cancelled (and indeed is automatically voided by the insurer on passing, it wasn’t particularly a choice) I suggest it should be costed in and certainly not hidden away 2 large documents deep.

No it’s not.

We did research and went with Admiral as they give named drivers, learners included, NCD. Plus no silly black box. All our policies carried on rolling each year as they passed. Each year I could have ‘saved’ a couple of hundred quid on a cheaper policy – but admiral charge £25 fee min/max total for multiple changes to policy.

The Financial Ombudsman Service is a free and easy-to-use service that settles complaints between consumers and businesses that provide financial services. We resolve disputes fairly and impartially, and have the power to put things right.

It can mediate. It can require companies to settle things. It doesn’t handle all complaints from all complainants though.

the costs are being moved more and more (as Johnners noted above) into these charges and admin fees so they aren’t part of the more legislated insurance part.

No one forced you to use a broker so those fees are on you. Just changed insurers and cancellation fees and fee for making changes is on page one.

I had to cancel a motorbike insurance policy with just a couple of months left, but my “refund” was swallowed up by the cancellation fee, and it ended up costing me money 🙄

I once had to cancel a motor insurance policy  and the broker wanted to charge a mental cancellation fee. I decided not to cancel and instead asked them to change the policy to cover my new car which was a Bugatti Veyron and also add my brother to the policy – he was an apprentice motor mechanic and provisional license holder. Sadly, they were not able to provide cover so had to give me a full refund with no charges whatsoever.

pistonheads is a good place to harvest reg numbers of uninsurable hyper cars. You’re welcome 😉

It’s’ a minefield. I’m in the process of trying to get my FIL a reasonable quote. He’s turned 80 and the policy has doubled! No accidents, no motoring convictions. I understand that older drivers can be a higher risk but that’s a shocking amount to charge.