Car/Home insurance rolling contracts

Old_Jack

Well I guess I'm in the minority, that's something I hadn't realised.I'd assumed that in these money conscious times that a majority would be shopping around for the best deals. From all I've read I should thank these lazy blighters for keeping my insurance costs down. It's time to close this chat I don't reckon there's any-more to say. Thanks for all your comments.

DCFC79

Old_Jack wrote: »

Well I guess I'm in the minority, that's something I hadn't realised.I'd assumed that in these money conscious times that a majority would be shopping around for the best deals. From all I've read I should thank these lazy blighters for keeping my insurance costs down. It's time to close this chat I don't reckon there's any-more to say. Thanks for all your comments.

i thinkmost people on here shop around for best deals, i know i do.

ihateyes

Old_Jack wrote: »

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?

number of reasons why auto renewal is good:

1) the letter doesnt arrive you forget about it and your house burns down....

2) your on a long cruise when the renewal letter comes through and renews, you come home to a flooded house

3) a family bereavement occurs..... renewing an insurnance policy isnt really the thought at the front of your mind.....

if your really that good at your dates their is no reason to gripe about auto renewal, as you should then get your quotes and act on one, not unless you have but forgot to cancel.....

to me the benefits of this out weigh the negatives including cost
you forget to renew you could cost yourself over £100k, or you simply pay the cancelation fee and go else where.....

OP have you EVER FORGOT to pay anything on time in your life???

ihateyes

and heres a current thread that proves auto renewal is good........ this OP is now at the mercy of the loss adjuster deciding if the leak was there prior to the insurance lapsing.....

https://forums.moneysavingexpert.com/discussion/comment/45886995#Comment_45886995

lisyloo

i thinkmost people on here shop around for best deals, i know i do.

Most peple on here yes.
But there are loads of people in the general population who hate anything related to finance and in some cases prefer to stick their head in the sand and ignore things.
There are lots of people who don't enjoy sorting out money.
You must know people who either do the minimum required, or those who actually ignore it and get into trouble usually with debt.
I am afraid we are in a minority but as Old Jack has realised that can work to your advantage.

System

If you pay up front for the car insurance to cover you for the whole 12 months then isn't it cheaper with most insurers, since you do not pay for what is basically a loan repayable over 12 months if you opt to pay monthly by direct debit.

I know some people will not have hundreds of pounds lying around to pay the lump sum, but putting aside some savings each month to pay these type of large bills would eventually allow them to pay up front and from then on save the additional charge for paying monthly.

And because you have a budget set for these annual bills, it's also less likely that you will forget when the renewal is due and make sure you check if you want to cancel before the insurer auto renews using your previous payment method (Debit / Credit card)

lisyloo

If you pay up front for the car insurance to cover you for the whole 12 months then isn't it cheaper with most insurers

Generally yes.
Only one problem - not everyone has the money up front.

but putting aside some savings each month to pay these type of large bills would eventually allow them to pay up front and from then on save the additional charge for paying monthly.

You are right of course, but it's just not that easy for some people, especially if their premiums are thousands and not hundreds, but you are absolutely right about budgetting.

Old_Jack

Yes paying up front would make, if cash is available, a further saving to a budget. I suppose I just don't like big blips in my monthly budgets.Obviously I pay many of my outgoings on annual basis but of course it's common for car tax and insurance to be at the same time, now if you have your wife's car plus yours requiring tax and insurance that's quite a knock. If car insurance keeps moving up at extraordinary rates then I will have to have a lean month ,pay up front and save some cash that way.
I have great difficulty with the statement that insurers don't make a profit. I wonder why they are still in business and why there are so many. Banks were involved in insurance and they do nothing without eyeing the profit to be made. Why pay such large commissions for new customers...but if the retention at the renewal rates is as high as suggested then that will be recovered.
I really am going to shut up now but I thank the pro's and con's for their input ,it does open the thinking process.

dunstonh

I have great difficulty with the statement that insurers don't make a profit. I wonder why they are still in business and why there are so many.

There are not so many. They have been closing down left right and centre for years. The UK is now one of the worst Western countries for insurance business.

Banks were involved in insurance and they do nothing without eyeing the profit to be made

Which is why none of them do car insurance themselves but only get involved on the retail side which can be profitable.

InsideInsurance

Insurance itself often is profitable, it is private car insurance that often isn't. In the old days the idea was to get people in on the car insurance and hope to more or less break even but then sell them home, pet, travel etc which all tend to be more profitable. Also, just because the car insurance market as a whole is making a loss doesnt mean that everyone is making a loss.

There probably not as many insurers as you believe, many of the underwriters have multiple brands of their own as well as affinity/ white label deals with other organisations. Brokers aren't insurers etc.

As to banks owning insurers, the challenge of banking is it typically isn't an up front cash business as you lend someone money and then have to wait 5 years to actually get your profit money in. Insurance on the other hand often get paid in cash up front or at worst gets paid over 12 months. Its therefore attractive to banks to own cash businesses.