AA inequality on prices

spinningsheep

Me and my housemate currently rent a 2 bed terrace, and we have our contents insured to the value of £40000 with AA insurance. For the last 12 months we have been paying £23.00 a month by DD, and we have just had our renewal price through. So, I went online to scour the market to see if anyone could better the quote, and on MoneySupermarket.Com, the cheapest quote was £100 cheaper, great I thought, and the provider was.........AA Insurance. I was confused. why would they be quoting me a renewal price £100 more expensive than if I was taking out a new policy with all the same names and details?

So I called them just now, explained the situation, and the lady on the phone told me it was due to the fact it was an online quote. I responded by telling her we took the policy out online this time last year, so that argument didnt hold any water. She then went on to explain it was because me and my housemate are not related. We weren't related on the online quote I just had either. THEN, she said it was because we were housemates and not partners!

I was a taken aback at this and asked her straight (if you'll pardon the pun) that if we were sharing a bed, we would get cheaper insurance? And she said...........yes. As non cohabiting customers, we are a greater risk!!

Incidently both me and my housemate are in fact gay, but believe you me, id rather stick rusty pins in my eyes if you get my drift!

I was fuming! I said I thought the reasons she had given were completely ridiculous and i wanted to speak to a manager, and also that I didnt want her to think I was angry at her, as I am sure she doesn't make the rules!

I am awaiting a call from a manager now, it may only be a £100 difference in the quote, but its £100 in my pocket and not theirs, and theres a principle in it all.

mattymoo

AA Insurance are not an insurance company in that they do not underwrite the risk. This is done by the insurance carrier and AA Ins Services are merely acting as a broker.
Therefore, one reason for the premium reduction could be a change of carrier who offers lower rates for your risk profile.

With regards to co-habiting etc. then yes, there is statistical evidence that married couples (including civil partnerships here) would be the best risk, followed by co-habiting with unrelated co-habitees bringing up the rear. The latter could include student accomodation for instance hence its bad rep.

Now for the delicate part, I could not determine from your original post if you and your housemate are living together as a same sex couple or merely two persons sharing a property. If you had indicated the former to the insurer but they had dismissed this, then technically it is discrimination.

If it was the latter then yes, they are correct.

Insurers databases do hold an awful lot of statistical data and this is used for their pricing considerations. Different insurers apply more weight to some stats than others and it is this balance that will either make them competetive in certain sectors or not.

BenL

Insurance companies do it all the time, renewals are more expensive as they don't bank on you shopping around and hope you will just keep the DD active and they will auto renew and make loads of profit out of you.

There is nothing stopping you taking the new quote out on-line and taking the intro bonus/new customer discount again. It is most likely that the policy you buy will go directly into their systems without a person ever seeing or reviewing it.

Its all explained in Martins article but you did the right thing shopping around at renewal time to find this out.

Ben