Insurance rip off

dazakkas

I just save £205 on my home buildings and contents insurance with the same company. I received my renewal in the post, it was £540. I then went on compare the market and received an identical cover quote from the same company, for £325. I rang the company, and was informed that they give discounts to the compare companies. I mean come on, £205 cheaper for the same cover with the same company, by buying through a comparison site? What an absolute rip off. Good mind to write to the insurance ombudsman, but I doubt if they are doing anything illegal. It pays to shop around!!!!!!!

InsideInsurance

It always does, new customers are incentivised to switch, insurers normally write the business at a loss in the first year. They then recoup costs through premium inflation as peoples price sensitivity decreases each year they've been a customer.

Parking_Trouble

dazakkas wrote: »

I just save £205 on my home buildings and contents insurance with the same company. I received my renewal in the post, it was £540. I then went on compare the market and received an identical cover quote from the same company, for £325. I rang the company, and was informed that they give discounts to the compare companies. I mean come on, £205 cheaper for the same cover with the same company, by buying through a comparison site? What an absolute rip off. Good mind to write to the insurance ombudsman, but I doubt if they are doing anything illegal. It pays to shop around!!!!!!!

What a cheek denying your insurer the chance to make an easy profit. Best to keep this quiet or everyone will want a fair renewal quote.

dunstonh

What an absolute rip off.

How?

Good mind to write to the insurance ombudsman, but I doubt if they are doing anything illegal.

They are not doing anything illegal. Its the same sales method uses in many retail areas. They offer year one discounting to new customers and sometimes they will offer that to retain you if you phone them. Of course, it means they dont make anything on you or even run at a loss but that is not illegal.

Parking_Trouble

dunstonh wrote: »

How?



They are not doing anything illegal. Its the same sales method uses in many retail areas. They offer year one discounting to new customers and sometimes they will offer that to retain you if you phone them. Of course, it means they dont make anything on you or even run at a loss but that is not illegal.

Where do the insurers actually say the price is for new customers only?

mikey72

It's not "year one discounting".

It's a penalty for loyal customers, and a way to make money out of those who either trust their insurers to be fair, (and are sadly mistaken) or who don't have time to shop around.

dunstonh

mikey72 wrote: »

It's not "year one discounting".

It's a penalty for loyal customers, and a way to make money out of those who either trust their insurers to be fair, (and are sadly mistaken) or who don't have time to shop around.

its not a penalty as their pricing is based on an them assuming a certain level of business paying that price. If no-one got an introductory discount then prices overall would be lower but the drop would not be as great as someone who has got the year one discount.

Where do the insurers actually say the price is for new customers only?

Three websites visited:

Direct line: Breakdown discount for existing car customers, first year only
Churchill: Applied as an introductory discount.
esure: Online discount as a new customer

Spiderham

mikey72 wrote: »

It's not "year one discounting".

It's a penalty for loyal customers, and a way to make money out of those who either trust their insurers to be fair, (and are sadly mistaken) or who don't have time to shop around.

You say tomato, I tomato. Doesn't really work written out.

Insureds are perfectly at liberty to shop around and insurers are perfectly at liberty to offer the renewal premium they want to offer.

mikey72

Indeed they are.

And if they never offer a fair price, as it says in my signature.........

Spiderham

mikey72 wrote: »

Indeed they are.

And if they never offer a fair price, as it says in my signature.........

Exactly. Personally I don't think it makes commercial sense to do the whole 2nd year loading thing as it leaves a sour taste and your more likely to get your renewals coming in as new business potentially losing you valuable information in your data on that customer. It also means customers are more likely to call your call centre, increasing costs. By the same token I don't think insurers should be banned from doing it, just that it's ridiculous and stupid.

Parking_Trouble

Possibly a !!!! analogy but hopefully you will get the point:-

I do internet food shopping with Sainsburys and Ocado.

I can set up a list of regular items and reorder each visit without selecting the individual items again.

Would it therefore be fair for the supermarket to add a few pence on each item on that list and use the excuse that if you made the effort to delete the list and recreate. or ordered separately you can get a lower price? I think not and sure they wouldn't be allowed to get away with it.

Three websites visited:

Direct line: Breakdown discount for existing car customers, first year only
Churchill: Applied as an introductory discount.
esure: Online discount as a new customer

Thanks for the examples but the description by the insurers is false. You just point it out to them and they price match.