MSE News: Opt-out selling of insurance add-ons may be banned

Former_MSE_Paloma

Firms may be banned from automatically opting customers in to add-on insurance products, if FCA plans go ahead ...

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Opt-out selling of insurance add-ons may be banned




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OnanTheBarbarian

Isn't this incredibly old news?

InsideInsurance

Now lets wait for all the complaints that insurers say the customer is on their own to recover their excess or dont get a courtesy car etc because they default as excluded

Given the devils share of business now goes via the aggregators where optional extras normally are defaulted as excluded anyway to get the lowest price it feels a little bit too late to solve a problem.

Pincher

A variation on this.


Just renewed with Churchill. They give you FREE Breakdown cover when you join, so I didn't say no. The renewal letter for year two includes Breakdown cover, at normal price.


Automatic opt-in? Or just same as last year?

InsideInsurance

Pincher wrote: »

Automatic opt-in? Or just same as last year?

Same as last year, opt ins cover new business sales not renewals.

If its an optional extra at all will depend on if there is an option to exclude it or not. If there is then going forward for new business sales they'd have to say its £500 excluding Breakdown with the option of the customer to add Breakdown for £0 meaning the total price is £500 (obv we will have complaints from people who forget to add it). If you dont add it then next year is quoted without it, if you do add it next year is quoted with it and now with a cost.

The other option is that they stop giving the option to exclude it and so it thus is part of all quotes. Its then up to them if they decide to show a price breakdown going forward as its a single policy now they can just say its £X and not provide a breakdown of the price by section.

OnanTheBarbarian

InsideInsurance wrote: »

Given the devils share of business now goes via the aggregators where optional extras normally are defaulted as excluded anyway to get the lowest price it feels a little bit too late to solve a problem.

Indeed, they all got a telling off for having the default of opt-in on motor LEI a while ago and all of them seemed to pull into line straight away.

It must be 2 years since that was sorted out and one has to question how prolific this problem now is as far as motor insurance is concerned?

Pincher

So Churchill has seen the ban coming, and was setting me up from last year. If only I claimed on the Breakdown cover, that'll teach them for trying to take my money.

InsideInsurance

Pincher wrote: »

So Churchill has seen the ban coming, and was setting me up from last year. If only I claimed on the Breakdown cover, that'll teach them for trying to take my money.

Plenty of companies, insurance and otherwise, include a service for free initially and charge subsequently or claim something is "for free" when in reality the price of it is simply built into the price of the associated item.

Ultimately the best advice will remain the same, shop around each year to find the provider that gives you best value. No point buying car insurance for £500 with free breakdown if you can buy car insurance without breakdown for £400 and breakdown separately for £75

Happy_Hippo

And how about a tick box for opt in / out for automatic renewal of the policy in year 2, rather than having to contact the insurer to cancel it?

How many buyers end up with 2 current policies because they did not cancel the auto renewal with the previous years insurer?

InsideInsurance

Happy_Hippo wrote: »

And how about a tick box for opt in / out for automatic renewal of the policy in year 2, rather than having to contact the insurer to cancel it?

Would see a significant increase in premiums if that occurred.

Generally the regulators support auto renewal because it reduces the occurrences of uninsured incidents. There are many posts on here from people who complain that their policy was autorenewed and they "forgot" (obv they dont admit that) and now having shopped around it isnt competitive. They forget that if the autorenewal hadnt happened then they'd have been driving around uninsured instead.

For the price of 1 phone call I am happy to take the effective price reduction it gives and have a safety net that if I am forgetful that at least I wont be uninsured even if it comes at an inflated premium.