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  • FIRST POST
    • MSE Tony
    • By MSE Tony 26th Feb 13, 6:37 PM
    • 60Posts
    • 11Thanks
    MSE Tony
    Insurance Renewal Fees
    • #1
    • 26th Feb 13, 6:37 PM
    Insurance Renewal Fees 26th Feb 13 at 6:37 PM
    Hi everyone, and welcome.

    More and more insurers are starting to introduce renewal fees – which we think is a bit of a cheek.

    We have listed some, and the charges they add on to your renewal premium, but is this going to be the start of a new insurance charge.

    We'd love to hear your thoughts and if your insurer is starting to charge you a 'renewal fee' and how much.





    This thread doesn’t just apply to car insurance renewal fees but also home insurance, bike insurance, any insurance.


    Thank you,

    MSE Tony
    Last edited by MSE Tony; 26-02-2013 at 7:04 PM.
Page 1
    • withabix
    • By withabix 26th Feb 13, 6:39 PM
    • 8,959 Posts
    • 7,908 Thanks
    withabix
    • #2
    • 26th Feb 13, 6:39 PM
    • #2
    • 26th Feb 13, 6:39 PM
    Fee's what?
    British Ex-pat in British Columbia!
    • thegirlintheattic
    • By thegirlintheattic 26th Feb 13, 6:44 PM
    • 2,700 Posts
    • 3,509 Thanks
    thegirlintheattic
    • #3
    • 26th Feb 13, 6:44 PM
    • #3
    • 26th Feb 13, 6:44 PM
    MSE fail
    Save £200 a month : Oct Nov Dec Jan Feb Mar Apr
    • rs65
    • By rs65 26th Feb 13, 7:14 PM
    • 5,068 Posts
    • 2,411 Thanks
    rs65
    • #4
    • 26th Feb 13, 7:14 PM
    • #4
    • 26th Feb 13, 7:14 PM
    More and more insurers are starting to introduce renewal fees – which we think is a bit of a cheek.
    Originally posted by MSE Tony
    Is it Insurers that are charging fees, or brokers?

    I haven't seen an insurer charging a fee - why not just enhance the premium. The only reason they would separate a fee is to avoid IPT on the fee element, if they would get away with that.

    If its brokers, then its because they don't earn enough on a pure commission basis.

    From your article:-

    Here are a list of policies we know who are imposing the renewal fee,

    Several of those are brokers - I don't recognise them all.
    • Quentin
    • By Quentin 26th Feb 13, 8:07 PM
    • 31,184 Posts
    • 15,167 Thanks
    Quentin
    • #5
    • 26th Feb 13, 8:07 PM
    • #5
    • 26th Feb 13, 8:07 PM
    .....We'd love to hear your thoughts ......
    Originally posted by MSE Tony
    To save face, remove the article and delete this thread!

    Presumably MSE have a so called insurance expert who gets paid for writing these laughable insurance articles (remember the one advising us all to cancel our policies mid term and switch to a cheaper provider!):

    http://www.moneysavingexpert.com/tips/15-02-2012/

    1. Don't wait until renewal to save. Unless you've claimed, you can usually ditch policies free, or at worst a £20 - £50 fee (if so, check savings overcome that).


    And all the posters who contribute do it here for free!
    Last edited by Quentin; 26-02-2013 at 11:32 PM.
    • vaio
    • By vaio 26th Feb 13, 8:12 PM
    • 11,899 Posts
    • 8,837 Thanks
    vaio
    • #6
    • 26th Feb 13, 8:12 PM
    • #6
    • 26th Feb 13, 8:12 PM
    something to do with the new management?
    • dacouch
    • By dacouch 27th Feb 13, 9:38 AM
    • 20,034 Posts
    • 12,339 Thanks
    dacouch
    • #7
    • 27th Feb 13, 9:38 AM
    • #7
    • 27th Feb 13, 9:38 AM
    Autodirect - Broker
    1st Central - Insurer (Rubbish)
    Ikube - probably a broker
    Kwikfit - broker
    Aquote - broker
    American Express - broker
    Forces Financial - broker
    Hastings Direct - broker
    Peoples Choise - broker
    Ingenie - Underwriting Agent (Two Insurers)

    Four of the above are basically the same two brokers.

    You're so not moneysupermarket
    • dunstonh
    • By dunstonh 27th Feb 13, 9:57 AM
    • 87,281 Posts
    • 52,434 Thanks
    dunstonh
    • #8
    • 27th Feb 13, 9:57 AM
    • #8
    • 27th Feb 13, 9:57 AM
    MSE Tony, the article is a mistake and a misunderstanding by MSE.

    You are mixing up brokers with insurers. The move to fees is an ever increasing move to explicit charging where the cost of the supply of the product is taken out of the premium (and reduced or even no commission) but charged explicitly by the broker. This should be welcomed and other consumer groups have said they prefer explicit charging as it removes the potential for commission bias in supply. It also lets the individual know the explicit cost of that "retailer" and not have it hidden as an undisclosed commission within the premium. So, why does MSE have a different view to other consumer groups?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • dacouch
    • By dacouch 27th Feb 13, 10:02 AM
    • 20,034 Posts
    • 12,339 Thanks
    dacouch
    • #9
    • 27th Feb 13, 10:02 AM
    • #9
    • 27th Feb 13, 10:02 AM
    MSE Tony, the article is a mistake and a misunderstanding by MSE.

    You are mixing up brokers with insurers. The move to fees is an ever increasing move to explicit charging where the cost of the supply of the product is taken out of the premium (and reduced or even no commission) but charged explicitly by the broker. This should be welcomed and other consumer groups have said they prefer explicit charging as it removes the potential for commission bias in supply. It also lets the individual know the explicit cost of that "retailer" and not have it hidden as an undisclosed commission within the premium. So, why does MSE have a different view to other consumer groups?
    Originally posted by dunstonh
    P.S Moneysupermarket are an Insurer...fact
  • weejonnie
    P.S Moneysupermarket are an Insurer...fact
    Originally posted by dacouch
    No they are not. Fact! Look on the FSA register and you will see that they only do Insurance Mediation
    Permission for:

    303190 - Moneysupermarket.com Financial Group Limited

    Requirements Article 3 MiFID exempt firm Activity Name: Advising on investments (except on Pension Transfers and Pension Opt Outs)
    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Commercial
    Retail (Non-Investment Insurance)

    Activity Name: Advising on regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Agreeing to carry on a regulated activity
    Limitation
    Limited to carry on regulated activities.

    Activity Name: Arranging (bringing about) deals in investments
    Investment Instrument
    Non-investment insurance contracts
    Unit

    Customer type
    Commercial
    Retail (Investment)
    Retail (Non-Investment Insurance)

    Activity Name: Arranging (bringing about) regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Dealing in investments as agent
    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Commercial
    Retail (Non-Investment Insurance)

    Activity Name: Making arrangements with a view to regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Making arrangements with a view to transactions in investments
    Investment Instrument
    Non-investment insurance contracts
    Unit

    Customer type
    Commercial
    Retail (Investment)
    Retail (Non-Investment Insurance)
    "

    Compare this with Covea, who have the following permissions (amongst others)

    Activity Name: Carrying out contracts of insurance
    Investment Instrument
    Accident
    Aircraft
    Aircraft liability
    Credit
    Damage to property
    Fire and natural forces
    General liability
    Goods in transit
    Land Vehicles
    Legal expenses
    Liability for ships
    Miscellaneous financial loss
    Motor vehicle liability
    Railway rolling stock
    Ships
    Sickness
    Suretyship

    Customer type
    All




    (Have you EVER seen an insurance policy signed off by Moneysupermarket?)

    Going back to fees - the FSA has already insisted that Financial services intermediaries charge fees for most financial products rather than take a commission and their aim, eventually, is to make this a condition of all financial services products (including insurance).

    Responders might like to guess how high a percentage of premium do intermediaries and brokers earn in commission on motor insurance.
    • dacouch
    • By dacouch 27th Feb 13, 10:56 AM
    • 20,034 Posts
    • 12,339 Thanks
    dacouch
    No they are not. Fact! Look on the FSA register and you will see that they only do Insurance Mediation
    Permission for:

    303190 - Moneysupermarket.com Financial Group Limited

    Requirements Article 3 MiFID exempt firm Activity Name: Advising on investments (except on Pension Transfers and Pension Opt Outs)
    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Commercial
    Retail (Non-Investment Insurance)

    Activity Name: Advising on regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Agreeing to carry on a regulated activity
    Limitation
    Limited to carry on regulated activities.

    Activity Name: Arranging (bringing about) deals in investments
    Investment Instrument
    Non-investment insurance contracts
    Unit

    Customer type
    Commercial
    Retail (Investment)
    Retail (Non-Investment Insurance)

    Activity Name: Arranging (bringing about) regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Dealing in investments as agent
    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Commercial
    Retail (Non-Investment Insurance)

    Activity Name: Making arrangements with a view to regulated mortgage contracts
    Investment Instrument
    Regulated mortgage contract

    Customer type
    Customer

    Activity Name: Making arrangements with a view to transactions in investments
    Investment Instrument
    Non-investment insurance contracts
    Unit

    Customer type
    Commercial
    Retail (Investment)
    Retail (Non-Investment Insurance)
    "

    Compare this with Covea, who have the following permissions (amongst others)

    Activity Name: Carrying out contracts of insurance
    Investment Instrument
    Accident
    Aircraft
    Aircraft liability
    Credit
    Damage to property
    Fire and natural forces
    General liability
    Goods in transit
    Land Vehicles
    Legal expenses
    Liability for ships
    Miscellaneous financial loss
    Motor vehicle liability
    Railway rolling stock
    Ships
    Sickness
    Suretyship

    Customer type
    All




    (Have you EVER seen an insurance policy signed off by Moneysupermarket?)

    Going back to fees - the FSA has already insisted that Financial services intermediaries charge fees for most financial products rather than take a commission and their aim, eventually, is to make this a condition of all financial services products (including insurance).

    Responders might like to guess how high a percentage of premium do intermediaries and brokers earn in commission on motor insurance.
    Originally posted by weejonnie
    err.....lol
    • Quentin
    • By Quentin 27th Feb 13, 10:59 AM
    • 31,184 Posts
    • 15,167 Thanks
    Quentin
    Weejonnie, did you know that the word "gullible" isn't in the Oxford English Dictionary?
    • Quentin
    • By Quentin 27th Feb 13, 11:06 AM
    • 31,184 Posts
    • 15,167 Thanks
    Quentin
    ......Responders might like to guess how high a percentage of premium do intermediaries and brokers earn in commission on motor insurance.
    Originally posted by weejonnie
    Whilst entering our guesses on your quiz, maybe we should also submit our guesses on how much money rogue brokers save on their advertising costs by sneaking in recommendations for their own firm on MSE, eh Weejonnie?
  • kanimisso99
    MSE Tony, the article is a mistake and a misunderstanding by MSE.

    You are mixing up brokers with insurers. The move to fees is an ever increasing move to explicit charging where the cost of the supply of the product is taken out of the premium (and reduced or even no commission) but charged explicitly by the broker. This should be welcomed and other consumer groups have said they prefer explicit charging as it removes the potential for commission bias in supply. It also lets the individual know the explicit cost of that "retailer" and not have it hidden as an undisclosed commission within the premium. So, why does MSE have a different view to other consumer groups?
    Originally posted by dunstonh
    I've heard of a news on upfront payment to financial advisors for investment and pension, but I feel it's a bit strange to hear this is expanding to all sorts of brokers and consumer groups are cheering for that.

    It would not be a big issue if those brokers reduced the premium by separating their 'advice' fee thus the total is the same, but I doubt it...

    Do comparison sites display the total price including the fee?
  • BertTheRaccoon
    I may be wrong but don't moneysupermarket own this forum?
    • dunstonh
    • By dunstonh 27th Feb 13, 7:02 PM
    • 87,281 Posts
    • 52,434 Thanks
    dunstonh
    It would not be a big issue if those brokers reduced the premium by separating their 'advice' fee thus the total is the same, but I doubt it...
    That is what is happening. The commission is being squeezed.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • BertTheRaccoon
    That is what is happening. The commission is being squeezed.
    Originally posted by dunstonh
    do you foresee the LEI gravy train drying up a bit if BTE providers have to actually start paying legal costs, resulting in the wholesale costs going up from 50p/ unit?

    LEI has always been a nice little earner to make up for lousy commissions on the actual motor policy hasn't it?
  • kanimisso99
    That is what is happening. The commission is being squeezed.
    Originally posted by dunstonh
    Why is it then that only handful of small brokers are doing this and most major ones are not?

    Looked at their websites, they seem to charge the same amount as a set-up fee for a new policy as well
    (so it's not insurers but brokers, not renewals only, the article was totally incorrect).

    If it's compulsary shouldn't it be included in the price they quote? I don't know if comparison sites calculate this in their results but if not it's a total mess!
    Sorry I don't know the inside structure of the industry but cannot help suspecting that those small brokers just want to make their quote look cheaper to be on the top of the results page.

    It's the same as Ryanair, ticket sellers, etc who charge compulsary fees at the end of the transaction. I thought the current trend was to include all those compulsary charges, rather than separating them???

    We're not asking brokers to recommend one of their products, but pin pointing a product and asking for a quote. Therefore not biased by the amount of commission they get.

    Strange to hear they are on the current government move, I think they're actually against it like Ryanair...
    • dacouch
    • By dacouch 27th Feb 13, 8:29 PM
    • 20,034 Posts
    • 12,339 Thanks
    dacouch
    I may be wrong but don't moneysupermarket own this forum?
    Originally posted by BertTheRaccoon
    erm...yes lol
    • dacouch
    • By dacouch 27th Feb 13, 8:31 PM
    • 20,034 Posts
    • 12,339 Thanks
    dacouch
    do you foresee the LEI gravy train drying up a bit if BTE providers have to actually start paying legal costs, resulting in the wholesale costs going up from 50p/ unit?

    LEI has always been a nice little earner to make up for lousy commissions on the actual motor policy hasn't it?
    Originally posted by BertTheRaccoon
    Most of the brokers I know moved out of motor a long time ago or just offer it as accomadation business.

    It's so labour intensive for small returns.
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