Home Ins renewal rip-off BBC Moneybox

huckster

Did anyone see this ?

http://www.bbc.co.uk/news/business-21632180

NatWest Home Insurance renewal customer charged over £1k for a renewal policy, they would have offered a new customer at a third of the price.

This is not unique to NatWest, but I wonder when the FSA/FOS will decide that this is unfair and make Insurers offer refunds.

Buzby

It is called market forces - and if a consumer is too lazy to seek a comparison, then a higher charge will be the outcome.

This isn't a new situation, it has existed for as long as I have purchased insurance (from 1970). Sometimes with just a few quid difference it isn't worth the hassle - but you invariably need to switch to keep the same cover at the same price.

If you challenge your existing insurer, you'll not be surprised to see some special discounts appear that bring it back into line again. If they don't, I take my business elsewhere.

It's not rocket science - just start searching 3 weeks before a renewal AND make sure any auto-renewal is cancelled.

ColinFishwick

Shop around new customers often get the best deals even using same insurance company can often be cheaper than renewal

rs65

huckster wrote: »

This is not unique to NatWest

It's not unique to insurance either.

You'll invariable get a better deal as a new customer on broadband, mobile, landline.

You need to keep an eye on gas and electric deals.

Similar with a mortgage, better deals available than SVR most of the time.

kingstreet

huckster wrote: »

I wonder when the FSA/FOS will decide that this is unfair and make Insurers offer refunds.

This suggests they won't;-

The Financial Services Authority told Money Box it expected customers to be treated fairly.

"We expect firms to ensure they are treating customers fairly at all times, including renewals," it said. "Generally, we view the decision of an insurance firm to provide cover and at what price as a commercial decision for the firm. However, we also expect firms to have customers at the heart of their business model."

The aggregator culture in this country means insurers can't give the cheapest new business premiums and the cheapest renewals. If everyone chose an insurer based on what it would do at renewal, based on some form of guarantee and not always chased the cheapest for a single year, it would put confuse the meercat out of business, and that would not be a bad thing IMHO.

As a broker, I use Paymentshield for my own cover. It isn't the cheapest, but the quality of cover is good and my claim in 2009 was quickly and well handled. The renewal is not that much more than the previous year's premium and it is monthly-paid with no cancellation fees should I decide to cancel mid-year.

forgotmyname

Same principle as your local supermarket putting the price of beans up from 10p to £1. You keep buying them instead of going to another supermarket where they still sell them for 10p.

Same thing?

dacouch

I've seen similar cases before, it happens typically to customers who've been with the mortgage provider for a really long time when the premium was in effect based on the sum insured and post code.

They received none of the discounts a modern policy includes eg age, claim free discount, type of property and security etc etc

essien

I really recommend anyone who has elderly relatives/neighbours who have held insurance with the same company for years to do some comparisons -they will not be getting the best deal on the market, no matter how they think 'loyalty to the company' will get them the best deal - take it from someone who works for an ins company it really doesnt !!! if i could i would tell this to any customer with a high premium, but then i would lose my job lol it pays to check probably a few hundred quid

Just_Some_Guy

Insurance going up massively at renewal is basically a laziness tax. Too lazy to shop around = you get screwed. It stems from the price comparison websites, who make you think that if your renewal is £10 more than the lowest possible quote then you're being ripped off. So now insurers compete to be at the top of the list for new customers and hope enough of them will be too lazy to shop around when it comes to renewal.

It's a grubby way of doing business, but until people stop caring about money it's the way it's going to be.