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Saying can be as good as signing

In March 2013, Bridget and James won a free consultation with an insurance adviser, Dependable Insurance (Dependable), for a comprehensive review of their insurance cover. Bridget and James met with Dependable in July 2013, completing an insurance assessment.

James met with Dependable again in August 2013, giving details of his and Bridget’s current insurance policies. Also in August Dependable sent Bridget and James a Record of Advice, detailing the insurance cover Dependable had arranged for them with Best Cover Limited (Best Cover).

In October 2013, Bridget completed and submitted to Dependable the application form for life, health and income protection insurance cover with Best Cover.

In November 2013, Bridget provided information, including payslips, to Dependable to complete their application. Dependable contacted James who verbally accepted the terms and the new policies with Best Cover were put in place. Bridget and James were advised by letter that the application had been accepted, and were posted a policy summary and another letter to sign to cancel their old policies.

The cancellation letter was never returned and later in November Dependable sent Bridget and James a reminder letter about cancelling their old policies.

In September 2014, Bridget and James asked Dependable for a refund of premiums that had been deducted from their account to pay for the new insurance with Best Cover. Bridget and James said they had not agreed to implement the insurance policies and that Dependable had no authority to deduct premiums from their account. Dependable declined to refund the premiums.

Bridget and James complained to FSCL.


The investigation

We reviewed all correspondence between Dependable and Bridget and James and found that Bridget and James had agreed to implement the Best Cover insurance policies. Bridget and James both filled out and signed the application for the policies, and James signed a direct debit authority. Bridget gave Dependable Insurance a payslip and answered medical queries to complete the application.

On the evidence, we concluded James had verbally accepted the Best Cover policies. Furthermore, Dependable had sent a letter to Bridget and James notifying them that the Best Cover policies had been implemented and telling Bridget and James about their 30 day free look period during which they could cancel the policies without penalty.

We also considered that Bridget and James had significantly contributed to their position by not taking opportunities to cancel the policies or withdraw from the application process at various stages. It was unreasonable for Bridget and James to think that the policies had not yet been implemented and that they were only asking for a quote.

We did not uphold Bridget and James’ complaint.


The lesson

Written confirmation is not always required for a binding contract to be made. Depending on the circumstances, verbal confirmation and supporting actions together can evidence an agreement being made. Many insurers offer a free look period and it is important to review your policies as soon as you receive them, as it may not be possible to cancel outside of the free look period without penalty.