directline premium increase for change of address

raghavendray

Hi,

Please bear my lengthy explanation

I recently moved and had to update my policy with the change of address. I called them to do it as my new post code was not recognised by their website. When I called i was told to pay £26 extra premium. When I asked the reason for the increase in premium I was told that this was due to the new post code and the premiums change from post code to post code. For some reason this didnt sound right especially as this post code was not recognised by them in the first place. Even the lady had to manually modify the postcode on her system. I was forced to pay as the policy would be invalidated otherwise.

Just to verify it I went back online where I could see the new address now. Now I tried to change the address back to my previous address just to check if the premium would go down. But instead it showed an increase of further £14. If the reason given by the lady was correct then the premium should go back to the previous amount.

My opinion is that since the insurance costs of increased they are charging me which is not right as I have paid for this years insurance in full and any increase should be charged only when the policy is due for renewal.

Do you think this is unfair for directline to charge me additional premium just for changing address. If so what do you suggest I do to get this money back.

Thanks

latecomer

Most insurance companies reserve the right to charge for any admendments made to a policy so I dont think you'll manage to claim anything back.

If its any consolation I moved from a flat in a ok area of Edinburgh where the car was parked in a residents car park to a house in a nice area where the ca is on the drive and my policy also went up. Best thing to do is move to change insurance companies when it comes to renewal time and state that your leaving due to these charges. If you are looking for the best deal you'd probably need to change anyway so you're not losing anything.

sarah_elton

Insurers have a database of postcodes, and different postcodes have different costs, just like the insurance groups of cars. Someone with the same size house in east London and a village in rural Cheshire (for instance) is not going to pay the same for their insurance. Your new address could have a slightly higher history of flooding, burglary etc.

Ask them if the increase is an administrative charge for changing address, or a change because the area you live in is deemed as higher risk by the database.

Because they couldn't find your postcode, my guess would be that the system looks for the nearest one it does know and rates based on that.

raskazz

It's not unfair. There will in all probability be two elements to the change: A premium to cover the change in risk plus a fee for administrating the change.

Hence the increase of £26 covers an increase in risk plus an administration fee. It is pretty clear that the potential further increase of £14 that you calculated online to revert to your old address is equal to a reduction in the risk premium plus the administration charge. In light of this it adds up perfectly well.

Even if the admin fee was zero, you would find that on changing back to your old address, the return premium would not equal the increase due to premium rate inflation since the policy was set up.

It is incorrect that any increase should be charged at renewal. They agreed to cover you for 1 year, in return for the agreed premium, on the basis of the circumstances at inception. Those circumstances have changed before the end of the contract, hence the change in risk and premium.

Edited to add: According to a post on the board elsewhere, Direct Line's administration fee is £17.85.

So the increase in risk at the new address (compared to the risk at your old address according to the rates at inception) is £8.15. The reduction in risk in changing back to your old address at today's rates is £3.85. So premium rate inflation accounts for the £4.30 difference in these figures, which is consistent with how the market has been performing.

raghavendray

Thanks for all the responses.

Since the lady didnt mention any administrative charges I was confident that there was something wrong. May be she was not correct. If they are authorized to charge a administration fee for any policy changes then I dont have a case.

Thanks again

stugib

Direct Line seem to prefer to do this rather than describe it as an admin charge. It also works the other way when there's otherwise a decrease in premium - I recently switched to a smaller, lower insurance group car, and they joyfully told me they'd be no increase in premium (gee, thanks! :rolleyes:)

When the paperwork came it showed £10.25 reduction in premium, with £10.25 admin fee. The premium has then come back down to a more competitive rate at renewal.

esswbee

Interesting experience with Kwik-Fit. I moved from address A to address B in same town. Additional premium charged which I paid (even though address B was arguably "safer" than A). Two years later moved to address C - different area. Again, additional premium charged as "more rural therefore more likely to attract car thieves". Hmm. Argued the toss and said OK but would not be renewing at end of year. Was passed to "business retention" dept who immediately did a deal and I ended up with a refund. They still charged the additional "postcode premium" but gave me discounts on everything else(!).

The best bit though was after another a year or so, I moved back to address A (i.e. the same house - don't ask!) and again I was charged a premium "because of the postcode". Emailed them twice disputing this logic - both ignored. Wrote to a Director. Have now had the additional premium "cancelled" and as I made this an official complaint have been promised an investigation etc.

Bad news is no sign of the "investigation" yet, also they claim to have e-mailed me a link to my policy bearing new address but it hasn't turned up. In fact, their "e-documents" never have arrived when changing address or renewing; I have always had to ask for snail-mail versions. I've stayed with them cos the premiums and cover are actually OKish but I may look elsewhere next time for a company with better processes :-)