Car insurance automatic renewal - is it legal?

Vicar_in_a_Tutu

Hi all,

My last year's car insurance provider has automatically renewed the policy, even though I never agreed to this specifically. I was out of the country when the renewal was due and yes they did write to me to say if you don't want it ring us.

However, I paid last years insurance in full up front, therefore I thought they could not automatically reissue a policy come the renewal date? I was led to believe that if you were paying monthly then yes, they could renew automatically as the monthly credit agreement was binding, but not if you paid all up front?

Can someone please help and advise is this a legal practice? ie do I now owe them some money for a months worth of policy I don't want, and more importantly never gave them my active consent to renew.

I think it's scandalous that they can renew, if you don't ring them. Surely the original contract I signed up for was one year's motor insurance, not to have it auto renewed.

To me it's like Tesco bringing you the same bag of shopping next week if you don't ring to tell them you don't want it...

Thanks in advance.

mikey72

You'll get all sort of opinions now on have you should have read the details, how it's a good thing, but the short answer is no-one has took it to court, so as to whether it is legal or not remains to be seen. FOS could be the first port of call, if you are charged to cancel, as you never asked for the insurance this year.

firstaspect

It was likely to be in your terms & conditions that on the renewal date they would continue cover and take payment as appropriate. I find it VERY annoying that companies often insist on renewing unless you tell them otherwise but unfortunately I very much doubht it's illegal in any way.

mikey72

I'd believe that if they offered you their best price on auto renewal, instead of an inflated price they will bring down if you ring them.
If they expect, and indeed do then haggle, they must be held acountable if they also expect to add a penalty if you do not have the oportunity.

dunstonh

I think it's scandalous that they can renew, if you don't ring them. Surely the original contract I signed up for was one year's motor insurance, not to have it auto renewed.

Check your contract. It will say auto-renewal.

Can someone please help and advise is this a legal practice?

Yes it is.

yes they did write to me to say if you don't want it ring us.

So its clear they have complied with guidelines for automatic renewal. You just chose to ignore them.

FOS could be the first port of call, if you are charged to cancel, as you never asked for the insurance this year.

FOS have ruled on this a few times. If its in the contract and clear on the renewal letter what you have to do next then they generally rule with the insurer. The OP has admitted that it was on the renewal letter. So, it would take some persuasion to get the FOS to say the insurer was at fault. They wont rule on it being unfair or fair as its not there is no law to say it cannot be offered. They just expect it to be clear and obvious.

Like mentioned higher up, I personally dont like auto renewal but it doesnt bother me at all as if I dont want to renew I just follow the instructions on the renewal letter. Its no big deal.

mikey72

dunstonh wrote: »

They wont rule on it being unfair or fair as its not there is no law to say it cannot be offered.

It's about time there was a test case, and then there would be a law.
It's not offered, it's compulsory at a stupid price and that's what we object to.
A fair solution would be opt in, not have to refuse year on year, but that would cost a fortune in lost revenue from the people that miss it and so pay well over the odds.

Dangermac

dunstonh wrote: »

Check your contract. It will say auto-renewal.


Yes it is.



So its clear they have complied with guidelines for automatic renewal. You just chose to ignore them.



FOS have ruled on this a few times. If its in the contract and clear on the renewal letter what you have to do next then they generally rule with the insurer. The OP has admitted that it was on the renewal letter. So, it would take some persuasion to get the FOS to say the insurer was at fault. They wont rule on it being unfair or fair as its not there is no law to say it cannot be offered. They just expect it to be clear and obvious.

Like mentioned higher up, I personally dont like auto renewal but it doesnt bother me at all as if I dont want to renew I just follow the instructions on the renewal letter. Its no big deal.

I completely agree.

If the letter says 'we will renew unless you call us', it seems fairly obvious what is going to heppen.

Not sure what all the fuss is about. If people dont want the policy to be renewed, just tell the insurer not to renew.

I cant see the Law Lords wanting to get involved in a test case, to support people who choose not to read or not to act.

foggytown

dunstonh wrote: »

Check your contract. It will say auto-renewal.

Ah, but will it? To the (undoubted) shock and horror of all insurance industry apologists in this goup, it has been reported more than a few times that some insurers are trying to sneakily enforce the autorenewal provision on a renewing policy, even though the expiring policy didn't contain said provisiion!

So its clear they have complied with guidelines for automatic renewal. You just chose to ignore them.

They were ignored only if they existed to be ignored.

FOS have ruled on this a few times. If its in the contract and clear on the renewal letter what you have to do next then they generally rule with the insurer. The OP has admitted that it was on the renewal letter. So, it would take some persuasion to get the FOS to say the insurer was at fault. They wont rule on it being unfair or fair as its not there is no law to say it cannot be offered. They just expect it to be clear and obvious.

See above. The provision's existence on a renewal letter has meaning ONLY IF the expiring policy provided for auto renewal. The next step, therefore, is obvious. Check the expiring policy (and the renewal offer that came just before it) to see if any mention is made of the insurer deciding to bestow on you the blessings of auto renewal. If there is, and you didn't object, then you're stuffed. If not, then you have a valid objection. Forget the FOS - this is simple contract law!

mikey72

I don't think they would be able to enforce the contact, if they offer exactly the same service for a much lower price if you don't auto renew. If you could prove the contract was inherently unfair, and bearing in mind simpy not refusing has never proved agreement, it would be interesting to take to court.
I've never been in the position, but for the cancellation fee I'd happily spend £25 on moneyclaimonline if it came to it.

olly300

It's legal for insurers to auto-renew policies

I complained to the FSA a few years back because the insurer I was with at the time had an auto-renewal policy where they didn't automatically send out letters and then made it difficult for you to cancel if you then didn't want this.

I wasn't caught out by this because I sent them a recorded delivery letter stating I didn't want this within one month of taking out my policy. However the insurer didn't answer my complaint letter properly about the other conditions I thought unfair such as why did I need to prove I had insurance somewhere else if I cancelled with them, I got p*ssed off and made a complaint to the FSA.

Anyway the FSA went through the policy with a fine tooth comb and found a few more inconsistencies then I saw. They made the insurer change their T&Cs

In short:
1. Auto-renew is legal and it needs to be mentioned in the Key Facts of the policy document
2. The insurer needs to send you a letter out before they auto-renew the policy. (However they don't need to prove you received it.)
3. If you want to cancel after the policy is auto-renewed the insurer can't ask loads of information like ask you to prove you have insurance elsewhere.

If the insurer breaks any of these conditions the policy could easily be considered unfair and so you should:
1. Put in an official complaint to the insurer in writing.
2. If your complaint isn't resolved and you lose out financially put in a complaint to the FOS OR
3. If your complaint is resolved but you are still p*ssed off send all documentation to the FSA

olly300

mikey72 wrote: »

I don't think they would be able to enforce the contact, if they offer exactly the same service for a much lower price if you don't auto renew. If you could prove the contract was inherently unfair, and bearing in mind simpy not refusing has never proved agreement, it would be interesting to take to court.
I've never been in the position, but for the cancellation fee I'd happily spend £25 on moneyclaimonline if it came to it.

Absolutely no need to take them to court.

You can sort it out for free and you don't even have to pay for your own lawyers.