automatic renewal

InsideInsurance

Insurers will do the exact opposite, it used to be the case that the insurer would send one letter advising you that you were going to be autorenewed and a second letter to say it had happened with the second containing your new certificate etc.

Most have now changed to do a single letter renewal process in that you get a single letter which contains the cert etc.

It is without doubt a fact that the more you remind people about the fact their policy is about to renew the higher the rate of switching is. A former client used to have circa 80% retention rate for those on auto renewal and about 65% for those on manual renewals (and that was before switching to a single letter renewal process).

If you say you are grown up enough not to require the safety net of autorenewal then surely you are also grown up enough to only need to be told once to do something and not twice in big red crayon?

As to free phone number, that tends to simply come down to the insurer you are with, some want customers to phone and do give freephone numbers for everything. Some want you to do everything online including saying your not wanting to renew in which case they have a high rate phone line to drive people to the website as they are an "internet insurer".

olly300

daphnevan wrote: »

Thanks to all who responded, I am able to read T & C and the renewal notices, my objection is to having to take further action to say no to automated renewals instead of opting out at inception.

My last insurer (who I was with for 2 years) and my current one all allowed me to say no to auto renewals at inception.

The one before tried to hide the fact they auto renewed in the small print with silly clauses to prevent you moving insurer which is why I put in a complaint to the FSA, who made them change more than that on their policy.

The FSA is keen on insurance companies treating customers fairly as they are very aware that some insurers where hiding the fact policies auto renewed in the small print a few years ago.

So I would be really surprised in the policy documents of your ex-insurer if the key facts don't state the policy auto renews. If they don't then you need to put in a complaint to the FSA.

7clubs

As someone who "may" have been caught out by auto-renew (long story), I am surprised that this sharp tactic by insurers is allowed, though understand the reasons why it exists.

Many defendants of auto-renew point out that a consumer who doesn't like the practices of a given provider are free to shop elsewhere - a budget airline was given as a comparison. Thing is, airline tickets are an optional purchase, car insurance is a legally-required one. On the basis that most, if not all, insurers are using auto-renew, taking one's custom elsewhere is not so straightforward. Any service that one is legally obligated to purchase by the powers that be, from a private sector provider, surely needs some degree of consumer protection, as opposed to allowing said private sector providers free rein to maximise profit? Sure, read the terms and conditions, I hear. Thing is, if you buy insurance over the telephone, with cover starting immediately and payment taken from a debit card, you are not told at the time of payment of the auto-renew element of the policy (or at least I wasn't, I would never agree willingly to such a thing). The paperwork arrives some days later, you read the terms and conditions, where it states that auto-renew "may" apply - what does that mean?
If, as in my case, you move house several months prior to the expiry of the policy (and no longer have use of the car), so do not receive an auto-renewal notice to decline, and the card made for the original payment has expired, the hounds of Hell "may" be unleashed upon you, which seems a little harsh.

dunstonh

Many defendants of auto-renew point out that a consumer who doesn't like the practices of a given provider are free to shop elsewhere

Which is correct. You are free to shop around.

Thing is, airline tickets are an optional purchase, car insurance is a legally-required one.

irrelevant. Whilst you have to have car insurance, you are not told whom you have to have it with. Indeed, it is far more flexible than your airline example as if you want to go a certain location you may only find one airline being available or just a small number at best.

On the basis that most, if not all, insurers are using auto-renew, taking one's custom elsewhere is not so straightforward.

Its a doddle. One quick notification and its done.

Sure, read the terms and conditions, I hear. Thing is, if you buy insurance over the telephone, with cover starting immediately and payment taken from a debit card, you are not told at the time of payment of the auto-renew element of the policy (or at least I wasn't, I would never agree willingly to such a thing). The paperwork arrives some days later, you read the terms and conditions, where it states that auto-renew "may" apply - what does that mean?

Yes, there are significant numbers of people who buy products without researching them first. However, you miss out the most obvious document that shouldnt be missed and that is the renewal letter. It is printed in plain text on the letter part of the renewal saying what you need to do next if you wish to renew or not. Its not hidden away. Its not on page 13 of some document. It is in the main part of the notice.

If someone is not reading their renewal notice then more fool them.

If, as in my case, you move house several months prior to the expiry of the policy (and no longer have use of the car), so do not receive an auto-renewal notice to decline, and the card made for the original payment has expired, the hounds of Hell "may" be unleashed upon you, which seems a little harsh.

You made a number of errors.

1 - you failed to cancel the insurance when you no longer had the car
2 - you failed to notify them of the change of address on a policy still in force
3 - you decided not to bother getting a mail redirect and accepted the risk that goes with that
4 - you decided not to read about the product you bought 12 months earlier

So, whose fault is it? The insurer or yours. (playing devils advocate so dont take it personally)

lisyloo

Does anyone have advice how to stop this at inception

Choose a company that doesn't do it?
I'm with Sheilas Wheels and they don't auto renew if you pay in full.

my objection is to having to take further action to say no to automated renewals instead of opting out at inception.

Well seems obvious to me that you shouldn't purchase products you don't like, especially when there are alternatives available that meet your needs.

As I see it

I'm not sure you udnerstand the consumer/provider relationship here.
They get to choose what they sell. You get to choose what you buy.
Why don't you but what suits your needs?

with a follow up letter to the customer in large font and free phone line to advise if not renewing

You do get a letter. Normally one side of A4 (not a lot to read). With "What to do next" often in bold, right at the start.
There are several easy ways to cancel.
It's really not rocket science.
Unfortunately it appears some people don't every bother opening or reading their post and this is pretty worrying. Yes some people do need a nanny and the public at large (pedestrians not just motorists) deserve to be protected from those sort of people.
If you are relatively intelligent i.e open and read your post, then you should have no issue whatsoever with the system.
If you want to be pro-active and even further protect yourself against postal mishaps you can also put the date in your diary.

You claim to be a fully fleged adult, so choosing an appropriate prodyct, reading your post etc. should not be an issue at all.

mikey72

I've never seen any test case proving it was legal or not.
In principle the aurgement that you agree at inception sounds fair, until you realise there is never any cost advised beforehand.
It's only stated when the renewal happens, or maybe a week or two before. The fact the cost is always substantially higher to renew, than to take out a new policy renders it unfair, as even the FOS mention the initial costs of setting up a policy, these aren't repeated at renwal, so in theory it should be cheaper.
So as an unfair contract, it seems a prime example.
The simple excuse of the insurer that they sent the letter, and if you didn't recive it, hard luck, can always be countered with the refusal being sent, but the insurer not receiving it.
Insurers never seem to accept that though.
So again, an imbalance of the contract.
I've never had an autorenwal happen to me, but I always refuse by letter, with proof of posting, so it'll need someone else to look at the contract in court.

lisyloo

It's only stated when the renewal happens, or maybe a week or two before.

It is normally about 3 weeks before, but there is nothing to stop people putting a date in their diary as indeed they would definitely have to do if they were not on auto-renew and were planning to conitnue driving.

The fact the cost is always substantially higher to renew, than to take out a new policy

It's not the case that it is always higher to renew.
There are several posters on here who haven't found that to be the case. I renewed this year (twice in fact).

and if you didn't recive it, hard luck

I don't accept this.
Surely those who want to NOT auto-renew would have to be pro-active about the dates.
So claiming you don't like auto-renew and you don't need nannying and then not being bothered to do anything at all doesn't make logical sense.

can always be countered with the refusal being sent, but the insurer not receiving it

Well it is a bit naive to rely on honestly when instruction in not in the receivers best interest.
There are several ways round this - getting written acknowledgement, recorded delivery, proof of fax sent, email receipts, recorded phone call etc.

Insurers never seem to accept that though.

They certainly do if you have proof.

But I certainly find it easier simply to use insurers without auto-renew, so I don't know what all the fuss is about.
If you don't like the product then don't buy it.

mikey72

That's your opinion, but no comments on whether it's legal or not.
(If you don't not what all the fuss is about, stop making one)

dunstonh

I've never seen any test case proving it was legal or not.

In the UK it is lawful until proven otherwise.

The fact the cost is always substantially higher to renew, than to take out a new policy renders it unfair

Renewals are not always substantially higher. Sometimes they are virtually the same or even go down.

mikey72

dunstonh wrote: »

In the UK it is lawful until proven otherwise.
Renewals are not always substantially higher. Sometimes they are virtually the same or even go down.

In the UK it is accepted until proven otherwise.

It would be an interesting case, especially if it was found that renewals should have been offered at the same price as new business. If it was retrospective, from your viewpoint the insurers would be ok, from my viewpoint I suspect their profits and bonuses would take a hit.