Esure cancellation after missed payment

[Apps]

Hi All,

 

I had a policy with Esure car insurance which was being paid via direct debit.

 

I'm currently unemployed and for the last few months it's been a struggle put the money together for some of my outgoings.

 

My credit card rejected payment to Esure last month but I covered the payment over the phone. When I rang Esure up I explained that the payment was missed due to lack of funds and was it okay to pay via another credit card and they were happy to obliged.

 

Unfortuently this month couldn't be met either as the money I have raised for outgoings cannot cover for bank and credit card charges. The money I had I gave to my partner so she could pay my bills via her credit card, unfortunely I confused the dates so didn't catch the missed direct debit for Esure. I calculated it from the previous payment date opposed to the actual date the direct debit should be paid.

 

When I rang Esure to make a payment they told me that as this was the second missed payment I had to now pay in full!

 

I explained to them that I'm currently unemployed and cannot afford to pay them in full but I can pay the current months outstanding amount. I was told that my personal circumstances was none of their concern and unless I pay in full my insurance policy will be cancelled with additional fees.

 

I asked Esure how much it would cost me to cancel the policy and was told they cannot provide this information over the phone and they would have to send me a letter. I kindly explained that this was delaying matters and the longer I have to wait the more it will cost me therefore they need to provide me the amount immediately. Eventually they gave me an average cost which of course is more than I owed them for this months payment.

 

So there are three options.

 

1) £30 - I pay my current balance over the phone. - This is something I can afford and Esure keep me as a customer.

 

2) £50.19 - I pay to cancel my insurance - I cannot afford the extra £20 as I didn't budget for this. Esure lose me as a customer. Finding work will be harder as I will no longer be able to drive.

 

3) £193 - I pay in full. Totally out of the question for me, if I had the money I wouldn't have taken out DD in the first place. Esure stay happy and keep me as a customer.

 

So essentially options 2 and 3 I cannot afford so Esure will lose business. Option 1 is affordable, keeps me as a customer but they refused payment from me leaving me only options 2 and 3.

 

Apparently they have the right to demand in full if I make one missed payment but I'm still working through their small print to find this information.

 

In addition when Esure took payment from me over the phone last month they gave me no warning that I would have to pay in full if an additional payment was missed.

 

Could anybody advise where I stand as I'm confused why a company would refuse payment that would forcibly remove a customer.

[unclebulgaria67]

This is not unusual. Such terms will normally be in the consumer credit agreement which is issued, when you pay by monthly installments. Sometimes it is also written within the policy documents.

 

Insurers try to save money, by limiting payment options. They don't want to employ too many staff to deal with payments. Imagine if half of their customers had payment issues. They would have to increase their premiums to a level, where they would be so expensive, that nobody would use them and they would go out of business. So many Insurers will only accept one or two last payments, before they ask for the remaining premium to be made or they will cancel the policy.

 

You would probably be best to pay the £30 by cheque, allow them to cancel and in the meantime arrange cover elsewhere. This is provided that you don't lose out on another years no claims discount and you can obtain affordable cover elsewhere. If Esure cancel, due to you not being able to afford the remaining premiums, then this is not a cancellation you have to declare in future. When Insurers ask about ' have you ever had a policy cancelled or refused Insurance, they really mean where Insurers have cancelled due to non disclosure, fraud, making too many claims and not to do with payment issues.

 

If you do send them the £30, in a letter just explain your position and they may just have to accept. Just make sure you can arrange affordable cover elsewhere before you do it. Remember that it is now a legal requirement to have Insurance, even if off road and if you don't have Insurance, you have to complete a SORN.

[Apps]

Thanks for your reply.

 

There's something I realised I didn't explain in my previous post.

 

Esure are refusing the £30 to continue my insurance but are prepared to take the £50 odd pounds to cancel it. The £50 is actually the outstanding £30 plus admin fee for cancellation.

 

So essentially they are saying we will NOT take the said '£30' for keeping you as a customer and keeping you insured but we will take the same '£30' to lose you as a customer and cancel your policy. It just doesn't make any sense at all.

 

Arranging cover elsewhere is simply not an option now as I doubt my bank will agree to any new direct debits.

 

 

I have looked at the policy document available online on Esure's website but there is nothing there that warns of cancellation after missed payment, (not that I can find anyway). I will look at the consumer credit agreement as you advise.

[unclebulgaria67]

I think the way it works, is that if they cancel, the £30 premium is due and they may or may not charge you the extra £20 cancellation admin fee. BUT if you phone up to cancel, they will include the cancellation admin fee.

 

Re setting up Direct Debits on your account. Depends, whether you have money going in regularly sufficient to cover any payments.

 

In your current situation, you might decide given the cost of running a car, that you cannot afford to keep it on the road. If petrol is £1.50 a litre now, wait to the next middle east crisis hits and it could go much higher. Plus if you offered a job via the job centre plus people, it is acceptable to have to commute anywhere with a journey time of up to 90 minutes each way. If you have a car running, even if the job did not pay much to cover the cost of transport, as well as all other living costs, you would probably have to take it or lose benefits. Without a car and reliant on public transport, that would be taken into account.