RAC Car Insurance Renewal 350% Increase

dinkydouglas

Last year I paid £204 for fully comp insurance with RAC. Unfortunately in July 2014 my car was involved in a minor collision, other party was at fault but Im still waiting for my excess to be refunded.

I will not bore you with the details or a sob story but its been one of those years and everything was chaos around the time my renewal was due. I was stressing about having to shop around for quotes and with everything else that was going on, this was least of my priorities. I reasoned with myself that if I just let it renew, yes my premium will go up it usually does but not by too much, and paying that little bit extra would be worth not having to stress about it. At least I knew I would still be insured until things settled when I could have a look into it properly.

So I was quite suprised when I finally sat down and started sorting all my personal admin to find that my premium for this year is £838!

I appreciate this is totally my fault but for the valid reasons outlined above.

Little bit excessive though don't you think?

Obviously to end the insurance I have to pay £80 in total, this is outlined in the contract, fair enough. But if I was a new customer to RAC their quote is £288 for exactly same policy.

I have been quoted £229 for exact same cover with another insurer, which I will be looking to take.

Im just interested to know what people thought and if there was anything I could do about recouping some of the money or not having to pay the exit fee then that would be a bonus.

Cheers

InsideInsurance

If you havent had your excess back then the claim is presumably still open and in which case it currently counts as a "fault" claim and will be impacting your NCD.

Have you checked on your renewal notice to see how the claim is listed and what NCD you currently have?

If it is still open thus fault and your NCD was reduced was your quote with other companies based on this fact?

Pincher

I get a high quote just for having a claim in my history, within the 3 years or 5 years horizon, even if no fault, and no outstanding funds to reclaim.


The moment the claim drops off the horizon for declaration, the quote drops.

nobbysn*ts

dinkydouglas wrote: »

Last year I paid £204 for fully comp insurance with RAC. Unfortunately in July 2014 my car was involved in a minor collision, other party was at fault but Im still waiting for my excess to be refunded.

I will not bore you with the details or a sob story but its been one of those years and everything was chaos around the time my renewal was due. I was stressing about having to shop around for quotes and with everything else that was going on, this was least of my priorities. I reasoned with myself that if I just let it renew, yes my premium will go up it usually does but not by too much, and paying that little bit extra would be worth not having to stress about it. At least I knew I would still be insured until things settled when I could have a look into it properly.

So I was quite suprised when I finally sat down and started sorting all my personal admin to find that my premium for this year is £838!

I appreciate this is totally my fault but for the valid reasons outlined above.

Little bit excessive though don't you think?

Obviously to end the insurance I have to pay £80 in total, this is outlined in the contract, fair enough. But if I was a new customer to RAC their quote is £288 for exactly same policy.

I have been quoted £229 for exact same cover with another insurer, which I will be looking to take.

Im just interested to know what people thought and if there was anything I could do about recouping some of the money or not having to pay the exit fee then that would be a bonus.

Cheers

Ring them, ask them to justify the excessive cost of renewal, against the £288 they would charge you as a new customer.
If they do not, raise an official complaint, and ask for a refund of the difference. If they won't refund, complain to the FOS, as they are 'not treating the customer fairly'

dunstonh

nobbysn*ts wrote: »

Ring them, ask them to justify the excessive cost of renewal, against the £288 they would charge you as a new customer.
If they do not, raise an official complaint, and ask for a refund of the difference. If they won't refund, complain to the FOS, as they are 'not treating the customer fairly'

InsideInsurance post #2 seems the most likely reason here. The renewal has likely lost its NCD whereas the op is shopping around with NCD.

nobbysn*ts

dunstonh wrote: »

InsideInsurance post #2 seems the most likely reason here. The renewal has likely lost its NCD whereas the op is shopping around with NCD.

We can all guess at to why some of think it's a fair price.
Or the op can ask, as per the first suggestion I made.
Personally. I'd rather ask, than assume they may have a reason.
Maybe I'll be surprised, and they can try to justify it.
If not, it's time to escalate the complaint.

InsideInsurance

nobbysn*ts wrote: »

We can all guess at to why some of think it's a fair price.
Or the op can ask, as per the first suggestion I made.
Personally. I'd rather ask, than assume they may have a reason.
Maybe I'll be surprised, and they can try to justify it.
If not, it's time to escalate the complaint.

Discussion forums would be very short if it was just "ask the retailer/ merchant/ manufacturer" etc which ultimately is the end answer though most questions have a fairly logical answer.

You can escalate a complaint but the FOS and FCA are both clear that price is a commercial decision at new business/ renewal and not subject to regulatory oversight beyond the PRA ensuring the business isnt going to make itself go bust

dinkydouglas

Thanks everyone for all your replies, really appreciate it.

The accident, outstanding excess claim and NCD I am aware of and understand that these would affect my renewal, Im on with that one.

It was more the excessive rise I was interested in other opinions on. Obviously I've contacted RAC and asked why, there merely said 'cos thats just what it is coming up at'. the customer service rep went away to apparently speak with his manager about reconsidering the premium but I was told his manager had said there was no negotiation. This was just before I got their quote as a new customer so tomorrow I will be ringing them to challenge it.

Thanks nobbysn*ts, I was thinking similar. Just needed bit of confirmation. Cheers

nobbysn*ts

InsideInsurance wrote: »

Discussion forums would be very short if it was just "ask the retailer/ merchant/ manufacturer" etc which ultimately is the end answer though most questions have a fairly logical answer.

You can escalate a complaint but the FOS and FCA are both clear that price is a commercial decision at new business/ renewal and not subject to regulatory oversight beyond the PRA ensuring the business isnt going to make itself go bust

Obviously you would prefer the idea it has a reason, rather than ask and find it hasn't.

As to the rest, they are also clear on treating the customer fairly, and not exploiting them with an unjustified premium simply because a captive customer hasn't disagreed to an automatic renewal. So it's not a 'commercial decision', unless you agree the decision was to mug the existing customer.

InsideInsurance

nobbysn*ts wrote: »

Obviously you would prefer the idea it has a reason, rather than ask and find it hasn't.

As to the rest, they are also clear on treating the customer fairly, and not exploiting them with an unjustified premium simply because a captive customer hasn't disagreed to an automatic renewal. So it's not a 'commercial decision', unless you agree the decision was to mug the existing customer.

It sounds an exceptionally large increase simply for trying to mug the customer and on the basis of the OP having not received their excess back it does sound like the claim is ongoing hence asking a simple thing for them to check on their renewal form.

You do not wonder why someone decides to come here rather than asking the company in question?

As to unjustified premiums, unfortunately the FCA and FOS dont agree with you and do see a quote for a new policy year to simply be a commercial decision for which the customer is free to chose to accept or decline as they are in no way locked into accepting the price quoted/ have no exit costs.

Absolutely it is a common strategy to heavily discount year one premiums and increase over years 2-5 - obviously each company has its own strategy. Certainly from my own experience of propensity modelling and measurements of elasticity the longer a customer has been with a company (not just insurance) then the more likely they are to stay and the less price sensitive they become. Its therefore more common a strategy to gradually increase premiums over a number of years to maximise overall revenue -v- tripling it in year 2 as the OP has seen

As RAC is a broker not an insurer it would seem odd that every insurer on their panel had this extreme response of tripling premium when its the market norm to increase over a number of years. It could be RAC didnt rebroke the deal but that too would seem odd but having never done any work for them I cannot claim any inside knowledge of their processes

They never actually answered the question of if the renewal quote showed a fault claim and a loss of NCD or not and thus if they are comparing apple and apples when they look at the RACs new business pricing. For those that want to bash insurers it wouldnt be very convenient for the renewal price to be based on 3 years NCD and a fault claim -v- the NB price being based on 7 years NCD and a non-fault claim.

dunstonh

dinkydouglas wrote: »

Thanks everyone for all your replies, really appreciate it.

The accident, outstanding excess claim and NCD I am aware of and understand that these would affect my renewal, Im on with that one.

It was more the excessive rise I was interested in other opinions on. Obviously I've contacted RAC and asked why, there merely said 'cos thats just what it is coming up at'. the customer service rep went away to apparently speak with his manager about reconsidering the premium but I was told his manager had said there was no negotiation. This was just before I got their quote as a new customer so tomorrow I will be ringing them to challenge it.

Thanks nobbysn*ts, I was thinking similar. Just needed bit of confirmation. Cheers

But are you comparing like for like? i.e. renewal quote with reduced NCD and fault claim with new business quote with reduced NCD and fault claim? or are you still using your higher NCD and showing it as a no fault claim on the search?