Watch out for year 2 insurance hikes!

GLH_1964

Joined the forum to warn people over the shocking price increases being charged by natwest following their 1st year beat any quote home insurance.

I paid £145 last year and they sent me a renewal quote for £840, amazing! Even worse when I rang to check this they reduced the quote immediately by nearly half with no more info from me!

I would like to know how Natwest can be allowed to operate like this. My complaint has fallen on stoney ground as you can imagine. They are trying and in some cases probably succeeding in ripping honest customers off. I searched for another quote elsewhere and immediately found one close to my original but I am livid at Nat West's attitude. Any tips on what more I can do to stop them doing this to others???

Cheers
:mad:

mildred1978

GLH_1964 wrote: »

Joined the forum to warn people over the shocking price increases being charged by natwest following their 1st year beat any quote home insurance.

I paid £145 last year and they sent me a renewal quote for £840, amazing! Even worse when I rang to check this they reduced the quote immediately by nearly half with no more info from me!

I would like to know how Natwest can be allowed to operate like this. My complaint has fallen on stoney ground as you can imagine. They are trying and in some cases probably succeeding in ripping honest customers off. I searched for another quote elsewhere and immediately found one close to my original but I am livid at Nat West's attitude. Any tips on what more I can do to stop them doing this to others???

Cheers
:mad:

Short of becoming their CEO, nothing.

dunstonh

That is what happens when you buy a product from a provider that has heavier year 1 discounting. The discount goes away in the years that follows.

I would like to know how Natwest can be allowed to operate like this.

Because they have done nothing wrong. They offered to price match in year 1. They did not offer to price match in your two and you end up on their normal pricing. Banks are historically expensive on insurance, investments,pensions etc. So, it should not be unexpected.

My complaint has fallen on stoney ground as you can imagine.

And so it should. There is no basis for complaint. It's a pricing model that not many like but the problem is that it is largely driven by the consumer and even companies that dont like it cant break it as it requires an acceptance that you will lose market share.

They are trying and in some cases probably succeeding in ripping honest customers off.

How are they ripping anyone off? The send out their price and you can choose to accept it or not. They do what they say they are going to do. So, no rip off. Just expensive.

vaio

mildred1978 wrote: »

Short of becoming their CEO, nothing.

Not so sure about that, the FOS impose a duty on insurers to treat their customers fairly and I suspect that a strong argument could put together that behaviour like this breaches that duty.

Didn't similar happen with banks and savings accounts when the interest rate on the account you opened gets reduced to below market rate and the banks are obliged to inform you and give the option of moving your money without penalty.

Maybe the same needs to happen to insurers so if the renewal is more than a new customer then you must be informed when they send you the renewal and even more so if the price is twice what it will be if you ring to query it.

Anyway OP, you have nothing to lose by putting a complaint in and maybe even referring it to the FOS

dtaylor84

vaio wrote: »

Not so sure about that, the FOS impose a duty on insurers to treat their customers fairly and I suspect that a strong argument could put together that behaviour like this breaches that duty.

Didn't similar happen with banks and savings accounts when the interest rate on the account you opened gets reduced to below market rate and the banks are obliged to inform you and give the option of moving your money without penalty.

You are already informed of the renewal rate and given the option of getting insurance elsewhere without penalty.

vaio

and I'm aware of that but there are significant amounts of people out there who trust banks and insurance companies to look after their (the punters) interests.

Do you really think it's "fair" to halve the cost of cover to those who query it whilst taking the money from those who trust insurance companies and so don't query it?

I think the bank rules need notification if your interest rate has decreased by more than x% relative to general market base rate changes.

What logic can there be against a similar requirement on insurers to highlight if your renewal has increased by more than the general increase in insurance?

Or are you suggesting that Barrow Boy tactics of £1000 but drop to £500 if the punters doesn't swallow it is acceptable (or fair) behaviour from insurers?

dunstonh

Not so sure about that, the FOS impose a duty on insurers to treat their customers fairly and I suspect that a strong argument could put together that behaviour like this breaches that duty.

The FOS will not consider complaints about commercial decisions. This is not a breach of TCF but a commercial pricing decision.

Do you really think it's "fair" to halve the cost of cover to those who query it whilst taking the money from those who trust insurance companies and so don't query it?

I think the bank rules need notification if your interest rate has decreased by more than x% relative to general market base rate changes.

What logic can there be against a similar requirement on insurers to highlight if your renewal has increased by more than the general increase in insurance?

Or are you suggesting that Barrow Boy tactics of £1000 but drop to £500 if the punters doesn't swallow it is acceptable (or fair) behaviour from insurers?

If they want to extend discounts into later years to keep market share at the expensive of profit then it is their choice. Its not a desirable model certainly but the FOS is not the place to get this pricing model changed. The FOS is not a consumer champion. The FOS make sure firms follow FSA rules. The FSA currently does not have anything in the rules on this.

Do you really think it's "fair" to halve the cost of cover to those who query it whilst taking the money from those who trust insurance companies and so don't query it?

A model that can work in any retail market.

mikey72

dunstonh wrote: »

..............A model that can work in any retail market.

"No money back, no guarantee
Black or white, rich or broke
We'll cut prices at a stroke"

Shame they choose to follow that market above others though.

vaio

http://www.fsa.gov.uk/pubs/discussion/dp18_ethical-framework.pdf

...Financial services is an important industry, affecting the lives of most people. The industry does not need to simply provide the necessary expertise, but to do so with an integrity that fully responds to modern society's expectations and engenders mutual trust.

Open, honest, responsive and accountable
Committed to acting competently, responsibly and reliably
Relating to colleagues and customers fairly and with respect

Open, honest, responsive and accountable....

Are you seriously suggesting that systematic behaviour as detailed in the OP is not at odds with the FSA ethics position?

dacouch

Ahhh Mikey is back to shake things up.

Good holiday I hope

mikey72

vaio wrote: »

http://www.fsa.gov.uk/pubs/discussion/dp18_ethical-framework.pdf



Are you seriously suggesting that systematic behaviour as detailed in the OP is not at odds with the FSA ethics position?

I would have no hesitation in reporting any of the prices quoted above as a complaint, particularly if the insurer can miraculously extend the "first year discount" into the second year.
My quotes have tended to be slightly overpriced at renewal, and don’t suddenly drop when queried though. Maybe because I do tend to find better prices when I shop around, but then, I leave no opportunity for them to suddenly find a better price, they know they have no chance with me, and their greed simply means I move.