Car/Home insurance rolling contracts

Old_Jack

Am I the only one who finds the insurance companies rolling contract methods a darn nuisance to me the customer. We are all now pretty savvy on not accepting the renewal quote from the insurers and so either change insurers or get a new policy with the same company on line with a saving. The snag is that the onus is on you to notify in writing or by telephone that you don't need their new policy if you pay your premiums monthly or they will carry forward the contract based upon the renewal document and take money from your bank account (bring back standing orders) .I had e mailed them with old policy and replacement policy numbers but this I found later isn't acceptable?? Usually the phone numbers will cost you 0845 etc. and then the rigmarole of selection at two/three stages. Why are we forced to accept these rolling contracts?

DCFC79

I dont find it an issue, just use a calender or google calender to make a note when the insurance is due or when you could start searching for quotes. Why is it hard to comprehend, its easy to do, take 5 minutes to sort. You could even make a note when the tax, mot and car service are also due and mobile phone contract as well.

InsideInsurance

That is actually an auto/ assumptive/ tasset renewal contract - rolling contracts are 1 month long, renew every month and are reviewed annually.

You are in a minority, whilst it is a "pain" to phone up to cancel it is a much bigger pain to forget to renew your car insurance and find yourself in court for driving without insurance.

With many insurers you can opt out of auto-renewal but you need to call them after purchase to remove yourself from it.

lisyloo

who finds the insurance companies rolling contract methods a darn nuisance to me the customer

Well I tend to go with insurers that don't auto renew, but no I don't find it a big deal to put all my important dates in a spreadsheet so I know what's happening.

The snag is that the onus is on you to notify in writing or by telephone that you don't need their new policy

What's difficult about diarising a date (in a way that suits you) and writing a very simple letter.

Why are we forced to accept these rolling contracts?

err.........you're not.
It's consumer choice.
I generally don't find I'm on auto-renew although I still check the letters to make sure.
Why don't you buy a policy without it?

Old_Jack

DCFC79...I do keep a very careful and precise record both of dates ,actual costs and forward budgets.

InsideInsurance....My thanks for a sane reply and for advising me of the correct term. The last line was interesting but once again you have to ring or write to get action....why cannot a OPT IN or OPT OUT contracts box be available when accepting on line quotes?

LISYLOO.....Have you a list of these insurance companies?

Finally it's an extra charge against your insurance(s) for phone calls and letters. This is an unnecessary charge.

InsideInsurance

Old_Jack wrote: »

InsideInsurance....My thanks for a sane reply and for advising me of the correct term. The last line was interesting but once again you have to ring or write to get action....why cannot a OPT IN or OPT OUT contracts box be available when accepting on line quotes?

Thats very simple to answer....

Manual renewal: ~60%
Auto renewal: ~75%

Above was the average retention rate for customers based on if they were on manual or auto renewal. If you obtain an additional ~15% points additional retention why would you make it easy for people to have manual renewals?

People are lazy, they dont find buying insurance interesting, make things as less painful as possible and basically hope they forget because they dont have to remember to do anything.

Manual renewals however have to make people do something, not only that but you have to keep reminding them that they need to do something. Well if you have to waste time phoning one insurer you may as well phone a couple. :A

YorksClare

This is how I ended up doubly insured for my cats last year. Finally cancelled the most ridiculous quotation - £323 for a nine-year-old cat! That's what my car insurance ought to be...

It is a nuisance that something I allegedly have to sign new paperwork for went ahead without me signing that paperwork. Grrr

Old_Jack

InsideInsurance....My thanks again that does explain the insurers logic, but why do ALL insurers quote very high renewal costs, is that because complacency amongst the public means a higher profit, surely as the costs are hiked up then the 15% will keep reducing, when will the point that competitive renewal quotes will be offered I wonder.

YorksClare....So I'm not the only one who is fed up of this "rolling" approach by insurers. In the happy days of Standing Orders they only applied for a contract period ,usually 12 months for annual policies etc. The insurers still will send out renewals and the choice is ours to continue or not.

lisyloo

LISYLOO.....Have you a list of these insurance companies?

Sorry I have not compiled a list, but I can tell you that Sheilas Wheels don't auto renew if you pay up front (or rather haven't in the past).
For motorcycles - ebike don't auto renew (or rather didn't in the past) when paying up front. I would guess the same applies to evan and ecar. I am afraid you will still need to check this information as I cannot guarantee they haven't changed their policy since I got my information. Also it might be different if you pay monthly.

Finally it's an extra charge against your insurance(s) for phone calls and letters. This is an unnecessary charge.

There is an argument that this is a saving for the vast majority (85%) that want to renew.
It might suprise you to know that it's actually a minority that shop around every year.
More importantly than the cost of a stamp, it ensures that some individuals are actually insured.
It's all very well considering the minority of savvy organised people, but you have to appreciate that most people are not like this.

Anyway you have choices, so if it's such a big issue then make it a criteria in your choice of insurer.
Personally I think that's mistake, but if it's a big issue to you, then make your choice accordingly and buy a product that suits you.
Of course you may have to compromise on other things if this is you main criteria and that's why I say that for the price of a diary entry and the cost of a stamp, that I think it's a mistake.

I'd rather have a good insurer who's going to be there for me in an accident rather than moan about the price of a stamp, but perhaps that's just me :-)

dunstonh

In the happy days of Standing Orders they only applied for a contract period ,usually 12 months for annual policies etc.

Which is an expensive way to pay and seeing as the consumer (in general) wants the lowest premiums, it is no surprise to see that option removed.

So I'm not the only one who is fed up of this "rolling" approach by insurers.

I don't particularly like auto-renewal but its not a big deal. The majority of people renew with the same insurer each year. So, they benefit with auto renewal. We have seen people who have not had auto renewal forget to renew or buy new insurance and have been caught by the police.

why do ALL insurers quote very high renewal costs, is that because complacency amongst the public means a higher profit, surely as the costs are hiked up then the 15% will keep reducing, when will the point that competitive renewal quotes will be offered I wonder.

They do not all quote high renewal costs. The ones that operate early year discounting or brokers that take a hit on commission in year one will obviously see an increase in year 2, 3 etc. However, there are those which do not work on that model and they are far more consistent in their pricing.

InsideInsurance

Old_Jack wrote: »

why do ALL insurers quote very high renewal costs, is that because complacency amongst the public means a higher profit, surely as the costs are hiked up then the 15% will keep reducing, when will the point that competitive renewal quotes will be offered I wonder.

Firstly, motor insurance is generally written at a loss not a profit and that factors in the people that have been with the same insurer for 20+ years and paying way over the odds.

The longer a someone stays with a company the more elastic they become in terms of pricing sensitivity. A new business customer will choose one insurer over another for the sake of 5p. Someone who has been with the same insurer for several years typically wouldn't switch unless they are saving £30+

Given first year business is typically written for a significant loss (remembering the aggregator gets £50, google gets £5 everytime a CPC banner is clicked etc) the insurer needs to recoup that loss by increasing the profitability of the customer.

It is a fine balancing act between pricing and retention. What insurers are starting to learn is that there are a group of customers that are promiscuous and will always switch for the sake of 5p. The challenge is to work out who this group are, ignore them and concentrate on the balance for the customers you do want to retain and get them to the 3 or 4 year point when you can get retention rates in the order of 95% even with healthy annual premium increases.

The amusing thing, for someone who works in insurance so dont expect it to be side splittingly funny, is that the aggregators fueled the promiscuity between insurers but seemingly believed that these newly promiscuous customers would remain loyal to their aggregator. Of cause people who've realised switching is best also switch their aggregators and so we now start to hear aggregators talking about life time value of customers, a phrase they never previously used :rotfl: