Car Insurance Crisis! HELP!!!

tom188

has to acceptance for a contract to be binding - surely when a consumer does nothing this is not acceptance

reading the terms and conditions shows that you are asked to accept this point when you agree to the insurance in the first place.

MarkyMarkD

losgigantes and nadnad are both missing the point.

The sort of contract which is being signed up to in the first place is not just an annual insurance contract. It's an annual insurance contract where you are giving the insurer the authority to automatically renew, every year, unless you tell them otherwise.

It's no different to (say) a membership agreement. I have several of these where the amount changes each year, but I have no quibble with the fact that it will auto-renew unless I say otherwise.

All of this boils down to is failing to read the documentation. And that's not illegal on the insurer's part.

CFC

MarkyMarkD wrote: »

There's no way that this is legally binding. Including such a term in the original contract, and then relying on it at renewal, is legally OK but they cannot change the terms of the contract to specify auto-renewal at the renewal stage.

Exactly, and aaronc says it was not in the original booklet sent out.

You may choose to believe that no insurer would make the mistake of having one thing printed and sent out and another thing on their website. I do not find it hard to believe at all. You'd be astonished at the mistakes that insurance companies and banks accidentally (or otherwise) make. Your mind would be boggled at some of the stuff that I've seen, including some big companies regularly breaking the BACS agreement - so if they were found out they could mean they would no longer be able to use DD.

Remember, the guidance that the companies get under the FSA is that a product should be explained in such a way that an 80 year old, non financially savvy granny can understand what they are buying....it is NO GOOD at all for a company to rely on small teeny tiny print with a fundamental condition of the insurance.

Complain.

nadnad

i agree with CFC - its no good hiding the fact that the contract will be automatically renewed it should be made very clear - ie when the OP rang the RAC and no one told him it would automatically be renewed.

and no markymarkd im not missing the point - you are missing my point. which is that this ploy that insurance companies use is not to the benefit of the consumer - its to the insurance companies benefit. they market this as if they are doing the consumer a favour but in reality they arent - there arent many people that i know that stay with the same insurance company year in year out - in fact most people (that i know) compare prices every year and usually switch - as this very website advises. Insurance companies know this and they (in my opinion) are trying to catch consumers out with this automatic renewal which many people dont understand. In the past I have had the renewal notice and phoned to cancel the insurance and the company somehow didnt have a note of my call and tried to charge me anyway, this has happened on 2 occasions - luckily i take the name of the person I speak to every time and could prove my conversion. My point is insurance companies are making money out of this scam because ordinary every day people who arent in insurance and dont read the fine print dont know whats happening.

Now you can ridicule all those who don't sit and read every page of their policy booklet and all the small print but in reality very few people do, they trust (rightly or wrongly) that these large companies aren't going to swindle them. Apart from that many people simply don't understand the jargon, and although moves have been made to make the language jargon free, its still quite complicated for a lot of people. For example - I can't count the number of times I overhear arguments in our customer service team over the meaning of a phrase in the policy booklet - senior staff have been involved and still no agreement reached - so if the staff of insurance companies are unsure of the meaning of some points in a policy you can't really expect every consumer to be can you?

at the end of the day this is a genuine mistake. you can go on about the legalities of it night and day. it doesnt matter, the op posted asking for advice and my advice to him is to write the letter and i would almost guarantee that any insurance company with an ounce of sense will let this one go. end of story.

losgiganteskid

MarkyMarkD wrote: »

The sort of contract which is being signed up to in the first place is not just an annual insurance contract.

But i'm afraid to say that's exactly what it is !!

MarkyMarkD

No, it's not. Just because the OP thinks it's an annual insurance contract doesn't make it one.

I'm not ridiculing anyone for not reading their policy information or even for not realising that their policy is an auto-renewal one. But getting a renewal notice which states something like "your policy will be renewed at a premium of £x - telephone us on 0870 xxx xxxx if you do NOT wish to renew" is pretty obvious to me.

nadnad, I suspect (but don't know) that you are in fact way wrong about the proportion of people who change insurers every year. Whilst there is a small core of moneysavers who check everything all the time, there is an even bigger core of people who don't care and don't check anything. Look at the 30%+ of people who still get their gas from British Gas even though they have been the most expensive supplier ever since gas deregulation. Some people simply don't want to spend the time sorting things out, and for such people auto-renewal IS a benefit as it avoids them becoming uninsured because they forget to renew.

Now, I'm not denying that insurers do this for their own benefit - they get a higher proportion of renewals amongst the lazy customers who don't check things out. But as I've pointed out above, those same lazy customers avoid driving around uninsured which has to be a public benefit.

losgiganteskid

MarkyMarkD wrote: »

No, it's not. QUOTE]

Come on then - tell us all why you don't consider it to be an annual contract.

When you apply for a quotation does anyone ask for how long you require cover, no, of course not - everyone knows (present company excepted apparently) that cover runs for 12 months from a selected date, this is why the certificate of insurance and policy schedule run for 12 months, cos it's an annual contract !! The policyholder agrees to pay the premium and in return the insurer provides the cover - it's quite simple really.

If you work for an insurer, phone up the new business quotation dept - ask for a quote and when they tell you the premium enquire whether that covers you for 12 months, you may be surprised !!:rolleyes2

MarkyMarkD

You might think that it's quite simple, but it's not.

If you sign up to join the National Trust, for example, you will become a member on an ongoing basis.

They will quote you an annual membership fee, up-front.

And a year later, they will automatically renew your membership, having given you prior notice of the renewal membership fee.

There's no reason at all why insurance contracts cannot work in exactly the same way. And that is the way an increasing number of insurers are choosing to set up their contracts.

I don't understand how you think that the fact that an initial premium, valid for the first year of cover only, negates the fact that it can be an ongoing insurance contract.

losgiganteskid

MarkyMarkD wrote: »

You might think that it's quite simple, but it's not.

If you sign up to join the National Trust, for example, you will become a member on an ongoing basis.

Why are you rambling on about the National Trust - we are talking here of a legal requirement, an annual motor insurance contract. I don't give one iota what the requirements, good or bad, of the National Trust are.

I ask again - if motor insurance in its current form is not an annual contract, (as you suggest) - exactly what is it ??. I'm sure the other thread readers would be pleased to know your definition.

I hope the original poster keeps us informed as to the outcome of this matter.

arronc

I will indeed, im writing the ltter and sending it recorded delivery tommorow