Car Insurance Premium - Puzzler

jeanec

Got my car renewal through today - as you would expect an increase in premium. I then got a phone call from my insurers checking that I had received them and asking me if I wanted to renew. When I said that I would be looking around to check for a better deal they immediately reduced my premium by £23. I said that I would still be checking with other insurers before I decide if I want to renew with them. Later today I rang them up to get a quote - as if I were a new customer and not an existing one. I gave them all of my details but gave them a different name - called myself mrs X instead of Mrs Y. The quote they gave me was £60 cheaper than my renewal premium! I then rang them back and asked why - as a new customer was I getting a much better deal than I am as an existing customer? They tried to waffle about all quotes are specific to the individuals details but when I said that the only difference was that I had called myself X instead of Y they said they'd look into it. I then got a phone call to say that because I'd LIED about who I was they wouldn't give me the cheaper premium that I'd been quoted being Mrs X - the new customer, and that my renewal premium would remain as they'd offered me being Mrs Y their existing customer!! Is this legal? It certainly isn't moral and just shows that they are "buying" new customers but not taking care of their existing ones. Has anyone had the same experience and is there anything I can do about it?

property.advert

Do it online.

For my car insurance, they reduced the offered renewal to the new customer amount but for the house insurance they said they could not do that and I simply went as a new customer. I later received an email on this subject so obviously a lot had done this.

As an aside, my house insurance was £120 or so last year but their initial renewal offer was £180. On the phone they put that down to £130 but could not explain why they tried to rob me blind. Online (already had a saved quote) was £110.

dunstonh

Is this legal?

Yes. They are allowed to offer new customers introductory discounts. There is no requirement for them to offer them to existing customers. Although some will do so if you contact them.

Some insurers do not like incorrect data on on quote portals. Yes it may have only been one minor non-pricing thing but remember that call centre staff are trained to be black and white on decisions. Not shades of grey.

It certainly isn't moral and just shows that they are "buying" new customers but not taking care of their existing ones.

Its not immoral but it is an ultimately flawed business model for the long term that creates damage in image and is damned near impossible to break without introductory offers being banned (and there is no indication of that happening).

is there anything I can do about it?

Change to an insurer that doesnt price on year one discounting and has higher existing customer discounts in later years (noting that it will initially cost you more but more likely to remain steady going forward) or stick with providers that do year one discounting but switch every year.

mikey72

Shop around.
You'll normally get a better deal elsewhere.
Why would you want to give money to a company that treats you this way?

InsideInsurance

Always a concern from an insurers point of view is that when you did your "dummy" quote you stated that you would answer all questions honestly, but you didnt. If you are willing to lie to get cheaper insurance, have you told the truth now? Would you tell the truth if you had a claim?

Really they are just being a bit !!!!y and I havent heard of insurers doing it before though that dummy quote will have unnecessarily cost them money. You need to decide if the £60 is worth switching for or not.

Christopher7

Don't bother trying to understand how insurance companies price their products, its a minefield, and i don't think they understand it themselves. They once explained that the incentive for me accepting a quote in my automatic renewal letter that was £100 more than an online quote (same details) was because I would lose the benefits of being an existing customer, she struggled to answer what those benefits were.

A few years ago when I first began driving I was quoted by the same company£200 more for third party insurance than fully comprehensive.

wannabehermit

Shop around, change to a cheaper insurer. I never stay with the same insurer. Although actually for the last 3 years our insurance has been with the same company, only different brokers each time. Same with our house insurance. I only stick with my current insurer if they are cheaper than quotes for a new customer - it does happen sometimes with house insurance I've found.

Christopher7 wrote: »

A few years ago when I first began driving I was quoted by the same company£200 more for third party insurance than fully comprehensive.

A lot of insurers will be cheaper for comprehensive than 3rd party, especially on older cars. I think their theory being that if you're fully comp you're more likely to drive more carefully to avoid making a claim for your own car, and apparently those who are fully comp are more likely to keep their car maintained than those who are 3rd party. Essentially insurers see those who insure 3rd party as higher risk than those who insure fully comp.

InsideInsurance

There are two key factors with TPFT/ TPO -v- Comp, firstly it is the preserve of the high risk driver and so with no low risk people in the common pool to add some fat the premiums must be higher. Secondly, the competition in this market is much lower and so less driving prices down (supply -v- demand)

Insurers can, if needs be, always explain their prices. The "challenge" is that the people you speak to when you phone up are normally telephone operators who put information into a black box which then gives them a number back with minimal if any explanation for it. The people that typically are creating the rules and the rates are not customer facing. The real issue can be that the customer facing people end up getting hard questions which they dont want to answer "because the computer says so". Incorrectly, some will try and effectively guess at "the right answer"

mikey72

InsideInsurance wrote: »

..........Insurers can, if needs be, always explain their prices. ..............

The usual expanation is that it is commercially sensitive, so again, trust is hard to win that way.

InsideInsurance

mikey72 wrote: »

The usual expanation is that it is commercially sensitive, so again, trust is hard to win that way.

Not to a regulator or someone who does have the right of an explanation, which ultimately a prospective customer doesnt have a right for one (though it could be argued its good service to give one).

Again, you seem to pick on poor old insurers again Go into House of Fraisers and ask them to exactly explain the difference in price of a Global 23cm cooks knife and a Linea 23cm cooks knife and I am quite sure they cant given accurate details but many will come up with some reason why the Global knife is "better"