Contents insurance: cancellation fees after enforced price change?

[papasmurf]

Hello all,

Is an insurance cancellation fee still applicable when the insurance company increased the price past the cooling off period?

My existing contents policy auto-renewed on 8th Aug 2018 at ~£185. I logged a claim from July on my previous policy (I was away so could not log the claim at the time) which has resulted in a £200 'additional cost' making the renewal for this year £385.

I have just done an online comparison and I can get the same cover (in fact better) and taking the reduced no claims period into account, for £160. I'm past my cooling off period so if I cancel my policy I will receive a pro rata refund on the existing policy minus a £35 cancellation fee.

I just wanted to check that the cancellation fee is still applicable under these circumstances as it feels unfair?

Any sound advice would be appreciated.

Thank you

[des8]

If the incident leading to the claim took place before renewal date, but the insurers were not notified of the loss until after renewal, or renewal terms were offered, they are entitled to vary the premium.

Is your policy placed directly with the insurers or through an intermediary (broker)?
I would not expect your insurers to be charging a cancellation fee, but it will depend on your policy wording.

[papasmurf]

Hi DES8, thanks for your reply.

If the incident leading to the claim took place before renewal date, but the insurers were not notified of the loss until after renewal, or renewal terms were offered, they are entitled to vary the premium.

Exactly, but I was expecting this - although not a rise of 110%.

Is your policy placed directly with the insurers or through an intermediary (broker)?

Directly.

I would not expect your insurers to be charging a cancellation fee, but it will depend on your policy wording.

But they have @£35. If it's in the small print then I guess I can't challenge it but it just feel after such a huge rise in the premium I should have the right to back out without being punished.

However, even after paying the £35 cancellation fee I can still end up with a better (more extensive) and cheaper insurance policy with someone else so I guess I'll just take my medicine and pay the cancellation fee.

Thanks

[des8]

I agree with you that it seems unfair to charge a cancellation fee when that cancellation is a result of a hike in premium, even though an increase was expected, the size of it seems exorbitant.

Although it is not, IMO, worth a court action you could make a complaint to the Financial ombudsman.
It will cost you nothing, and who knows, he may agree with you and you'll get a refund!

care to warn us who the insurer is?

[papasmurf]

Thanks again for the advice. The insurer is Tesco Home Insurance, underwritten by Tesco (they have a number of underwriters as I understand).

[des8]

So as expected Tesco are not your insurers .
They are agents who underwrite for a number of different insurance companies.
They are only intermediaries.

As te insurance was cancelled after renewal because of a premium increase you have the right to cancel without penalty.
The insurers can charge for their on risk time, but IMO it is unfair for the intermediary to make such a charge.
I have a vague recollection that somewhere there is a case about this, probably on the FOS website.
I'll have a look later for it