Sky Insurance Broker

[kregrs]

I currently use Sky Insurance as my broker to arrange my car insurance, and have just renewed my policy with them having been using them since Sept 2011. I renewed my policy on 20th Sept this year, with the 1st installment due on 5th Oct. Unfortunately I was 30p short on the direct debit, so it bounced, and was referred back to Sky. I cant remember who the actual policy is with, just that Sky are the broker and Creation supply the finance.

Anyway, Sky rang me on Oct 10th to take payment over the phone, to this they had added an admin charge of £25, which I refused to pay until I'd had a breakdown of how they reached that figure, and which they have failed to provide, only quoting that it is in their terms and conditions and that a breakdown is not available. Please just bear in mind this is their admin charge, not Creation or the actual policy provider.

Today I receive a letter to say that as they have not received the admin charge they are giving me 7 days notice that they are cancelling my policy.

Now, if it is their charge as a broker, why are they looking to cancel my policy? My policy is up to date, so isn't it a bit unfair to cancel my policy because their charge hasn't been paid? And £25 seems a bit steep anyway, especially when they are unwilling to provide a breakdown of the charge.

[Sidewinder]

I may be sticking my neck out here, but personally I think the likely effects of having your insurance cancelled will be greater than having to pay what may or may not be an unlawful penalty charge. You would need to declare cancelled insurance to any future provider so may find it difficult to get them to agree to cover you - particularly on instalments.

 

Others will no doubt have a greater insight, but I have certainly found insurers (and brokers) completely immovable when it comes to the issue of charges which are stated in T&Cs

[Nagasis]

At the risk of having no insurance, I would pay the admin charge under protest and then attempt to reclaim it (if that is even possible).

 

I certainly would not let my insurance be cancelled as you can bet there will be cancellation charges.

[kregrs]

Thanks, above points taken on board. But how can what is in effect a middleman, cancel my policy when the sum requested is not payable to the insurance company or finance provider, but to themselves? Do they have any right to cancel my policy, having looked through the t & c's I haven't found anything relating to it, in their letter they claim I have broken the contract between myself and them and will therefore cancel my policy on 26/10/12.

 

Sky Insurance t & c's - http://www.skyinsurance.co.uk/terms_of_business.html

[unclebulgaria67]

Thanks, above points taken on board. But how can what is in effect a middleman, cancel my policy when the sum requested is not payable to the insurance company or finance provider, but to themselves? Do they have any right to cancel my policy, having looked through the t & c's I haven't found anything relating to it, in their letter they claim I have broken the contract between myself and them and will therefore cancel my policy on 26/10/12.

 

Sky Insurance t & c's - http://www.skyinsurance.co.uk/terms_of_business.html

 

What happens these days is that some brokers actually buy the Insurance in by a wholesale rate and then add their various bits on top to sell the policy. So any admin fee will be a part of the Insurance contract and will be payable to avoid them cancelling the policy. Admin fees are allowed by the FOS, as long as they represent the costs incurred. £25 will probably be accepted as reasonable, so I would suggest that you pay it and if you still unhappy that you raise a complaint afterwards.

[kregrs]

But I have no idea as to whether £25 is fair or not, as when I ask for a breakdown it is flatly refused.

[unclebulgaria67]

But I have no idea as to whether £25 is fair or not, as when I ask for a breakdown it is flatly refused.

 

Why would they break down the £25. It is just an amount that they want to charge. It is not a worked out amount. They have just assessed that this would roughly cover their costs in dealing with the payment issue.

 

Nb. I don't like these fees either, but many Insurers charge these fees and it is difficult to find a company that does not apply them.

[Sidewinder]

Agree with UB's comments. I don't like them - in fact I think they are appalling, but that isn't the point. They are written into the contract and we are free to go elsewhere if we wish, but each insurer is pretty much the same. A fee for a duplicate document, a fee for a mid-term alteration, a cancellation fee, an admin fee. The only way to challenge them would be through the courts under UTCCR, however in that case you would have to contend with published FOS evidence to suggest that a £50 charge (for example) as an 'Admin' fee is not considered unreasonable, which would make your £25 seem like a bargain!

 

OK - it applies to a house insurance complaint, but the same principle would abide

 

From http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

 

Mr Y insured his house with the firm in June 2005. When he married in December that year, he sold the house and cancelled his policy. In accordance with the cancellation condition in the policy document, the firm made a pro rata refund of his premiums, less a sum of £50 to cover its administration costs.

 

Mr Y thought it unfair of the firm to levy an administration fee, since he considered that administrative costs should already have been built in to the amount he had paid for his insurance.

 

Complaint rejected

 

We agreed with Mr Y that the firm had allowed for administration costs when it calculated the price of its policy. However, since the policy had only – in the event – lasted for six months, the firm would not have recouped all of these costs; it had only received half the annual premium. And we were satisfied that it had also incurred additional and unexpected costs in cancelling the policy. We therefore rejected the complaint.

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[kregrs]

So it seems I just have to pay it and put up with it.

This has all been for the sake of 30p! I missed the direct debit by 30p, found out the day after and immediately rang the broker to pay by card. This was refused as the finance people hadn't advised them that the payment had bounced, and it apparently takes 5 days for them to do so. So I rang Creation Finance, who still wouldn't accept a card payment as they were waiting for confirmation from the bank, although they wouldn't be making a 2nd attempt to take the money.

Lesson learned now though, 25 quid for the sake of 30p!