Because this blog post has gained ranking in Google for searches relating to the 14 day cooling of and cancellation period I have added the following: 

For facts regarding 14 day cooling off periods, refer to the FSA handbook:

http://fsahandbook.info/FSA/html/handbook/ICOB/6/2

Items marked with a capital ‘R’ are rules.

If you need further advice the FSA can be contacted by phone: 0845 606 1234

It makes sense to fully read and understand the terms and conditions of your contract before committing to anything.

What I have learned: The 14 Day Cooling off period for insurance is pointless because insurance companies are allowed to charge a ‘reasonable’ fee  for admin charges even if you cancel within the statutory 14 day period.

You can dispute any fees if you think they are excessive and unlawful. Your insurer should have a complaints procedure for you to follow or if in doubt, contact the FSA.

No cancellation fee to pay and nothing to pay for the 48hrs car insurance cover I theoretically had.

Today I tried calling NU again. This time to determine what was meant by ‘the date of purchase of the contract’ because according to their terms:

‘You have a statutory right under Financial Services Authority rules to cancel your policy within 14 after the later of the date of purchase of the contract or the day of which you receive your policy documentation.’

I didn’t need to determine the day I received the documentation because that was pretty obvious.

Anyway, I spoke to Raman in their call centre in India who told me that NU no longer offer a 14 day cooling off period for any insurance contracts, including renewals.

Naturally I was shocked because the FSA told me that a 14 day cooling of period was statutory!

I felt compelled to tell the FSA what I had been told so I gave them a ring.

What I learned from the FSA this time was that although a 14 day cooling off period was statutory, insurers have a right to charge a reasonable admin fee even if you cancel your policy in this 14 day period.

This is allowed because it puts people off of buying a policy then canceling after the documents come through so they have a certificate to wave around if the get pulled over. It also deters people from buying a policy just to drive for a few days then canceling when they should just ask for short term cover!

What this means is NU were perfectly entitled to charge an admin fee despite my policy being cancelled within the 14 day cooling off period.

But they haven’t, they’ve waived all fees and I don’t owe them a penny!

This is because I was told initially that, due to no payment having yet been taken, the new policy had not officially come into effect and I could still cancel without charge.

Even though this had been dismissed in subsequent calls to NU it was something I had been told by one of their advisers so they had to honour it.

Remember, when you call anyone to talk about queries, complaints, your rights or for official information, ALWAYS ask for the advisers name. Try to make notes about what you have been told and record the time.

Most large financial organisations record conversations so they will be able to refer back to their own notes and confirm what you have been told.