Massive Increase in Home Insurance

Mannion

I have auto renewed my home insurance with an insurer for several years and just checked the premium with comparison sites. I was astonished at how much they are overcharging me. Rough figures follow:

A. Comparison sites top 10 range £150-£300
B. New quote from my insurer £1000
C. My current premium £1850

The first 2 policy quotes (A & actually contained extra cover compared to my current policy (C) as well.

I've read around the forums and see that in most cases this would leave me in a position where there is nothing I can do to reclaim any overcharging. This seems absurd to me as any purchase should be agreed by the purchaser and to me that does not just mean putting something in the post to someone. It is easy to get a response from a customer through modern means of communication and you should need to prove that a customer is aware of any price increases. In my opinion the industry is archaic and corrupt and needs to change. Auto renewing should never be a default policy condition.

This whole approach leaves the vulnerable, the sick, the infirm or even those who have extreme time constraints including caring for disabled or terminally ill relatives in a position where they can be legally ripped off. I think it is an absolute disgrace and there is no valid justification for it at all.

My case is also somewhat complicated for two reasons:

1. Firstly due to work commitments I had to change location. I rented out the insured property while living in new rented accommodation. My mortgage lender allowed me to do this under the condition that I kept my home insurance with them. This produced an immediate significant increase that I was aware of. My policy also increased fairly significantly for the period that I was insuring the property that I rented out. I was aware of this but it does seem fairly close to extortion as I didn't have another option. However I did not complain at this point.

2. When I returned to work near my property and moved back in after several years I phoned my insurer and let them know of the change of circumstances. This obviously included the fact that my address has changed and that I would now be living full time and the insured property. The change in premium was negligible which I queried at the time as it seemed odd. I stayed with the insurer at this time quite naively I admit. Since that day I have received no updates regarding my insurance policy. I found out yesterday that this was because they have still been sending my correspondence to the rented property's address. In the 3 years between the phone call and now my policy has doubled and through no fault of my own no one has told me about this.

Yes I could have gone online and looked at my statements more often despite quite a lot of technical difficulties and not a lot of opportunities. I appreciate that. However I think the industry is to over protected. At what point does slapping a huge extra percentage on a premium every year, in the hope that the policy holder does not get the chance to review it, become a crime? £150 increased to £1000? to £10,000? to £100,000? to £1,000,000? If there is no limit its a disgrace. If there is a limit then how is it acceptable at any level?

dunstonh

I've read around the forums and see that in most cases this would leave me in a position where there is nothing I can do to reclaim any overcharging.

That is because you are not being overcharged. They are offering their price (which is higher than you can get elsewhere) but you are accepting their offer. You are paying exactly what they should be paying for what you accept.

This seems absurd to me as any purchase should be agreed by the purchaser and to me that does not just mean putting something in the post to someone.

You are agreeing it.

Auto renewing should never be a default policy condition.

It is not. Many companies do not use it. Some do.

This whole approach leaves the vulnerable, the sick, the infirm or even those who have extreme time constraints including caring for disabled or terminally ill relatives in a position where they can be legally ripped off. I think it is an absolute disgrace and there is no valid justification for it at all.

And without auto-renewal, those same people could find themselves uninsured and left without cover at a time of need.

There are no issues to complain about here. Every year they offered terms and every year you accepted them. Your choice. No-one else forced you.

Mannion

Thanks for the replies if a little opinionated in places. Please read the entire post before responding though. It is interesting that some seem to take the providers side even making incorrect assumptions as part of the defence?

How exactly did I agree to the increase when it wasnt sent to my address. Im hoping the phonecall does exist and I have requested that it is recovered. Thanks for blindly assuming that Im lying by the way.

If you read carefully you could see that the call must have taken place as my policy changed to state that itcwas now my main residence and no longer being rented out. Explain how that change took place without my address changing Sherlock.

I wilk respond to some of the innaccurate counter arguments later

Mannion

If you really believe that sending snail mail letters out with potentially unlimited price hikes out to the vulnerable is the best way to guarantee them fair cover then you are either living in the past and or very poorly equipped to come up with a real solution.
Posting is unreliable its a fact. Mail gets lost (Its never sent recorded delivery hmmm I wonder why) There are numerous cases of gross OVERCHARGING using this backward immoral method. Do some reading and get with the program. Its a classic con.
Following your logic its ok because:
a) Its the current system
b) Its not currently legal like many curre tly illegal scams used to be
c) Its totally the customers fault because its possible to avoid
Absolutely none of these reasons counters the fact that it leads to thousands of people being conned out of large sums of money FACT and it would be so easy to set up an eassier system which did not allow such price hikes. Off the top of my head phonecalls, registered delivery, email, apps, SMS
The only reason for not improving tbe method is because its an immoral cash cow for this backward corrupt industry and you know it.
One further thing I noticed you didnt respond to theprice hike to £1000000 So that would be fine too I suppose. Absolutely ridiculous.

FutureGirl

It is your responsibility to check to see if you can get insurance cheaper elsewhere. You know when your renewal date is, so if the letter doesn't turn up in time - phone them and ask them what your renewal price is. Takes 5 minutes our of your life to do. You can then make your own decision regarding who you want to be insured by.

You're accepting the new price by paying the premium.

You can always change to non auto-renew at any point as well, just call them and tell them.

Obviously an insurer wouldn't put their policy premium up to £100,000.00 or more, what a daft thing to suggest. Whilst there is no 'cap' on insurance, the FOS can still determine whether a policies pricing is unfair and unreasonable if complained to.

Anyone who just lets their policy auto-renew without checking the prices etc has only their self to blame, and has no points to complain about, as it's their own responsibility to check these things.

As this is a MoneySaving site, the advice given is, if you don't know your renewal date - check the policy, then write it on the calendar, or set a reminder on your phone.

dunstonh

Thanks for the replies if a little opinionated in places

You do realise that yours is an opinion too.

It is interesting that some seem to take the providers side even making incorrect assumptions as part of the defence?

Some of us are perhaps less biased than you are.

I am no fan of auto-renewal. I prefer it wasnt there. However, statistically, most people renew with the same company and it saves work. In turn that keeps premiums overall lower. There have been posts on this site where people didnt have auto-renewal, forgot to renew and got caught out by it.

Posting is unreliable its a fact. Mail gets lost (Its never sent recorded delivery hmmm I wonder why)

its not a fact. Yes, a small proportion of post goes missing. However, in those cases, auto-renewal would be a good thing as it would avoid the person losing their cover at renewal and not getting a replacement.

There are numerous cases of gross OVERCHARGING using this backward immoral method. Do some reading and get with the program. Its a classic con.

Paying the price on the ticket is not a con.

You need to stop saying things are factual when they are not. They are your opinion. You have every right to your opinion but it does not make it fact.

One further thing I noticed you didnt respond to theprice hike to £1000000 So that would be fine too I suppose. Absolutely ridiculous.

Silly hypothetical scenarios don't deserve a response.

Mannion

You do realise that yours is an opinion too.

Yes but your reply already implied that my original post was opinionated. I was simply saying "back at ya". If you look at a large percentage of your responses they are phrased as statements of fact and not as opinions. So now we are both aware of that we can move on.
At least I didn't cast insinuations about your integrity (first anyway)

Silly hypothetical scenarios don't deserve a response.

Personally I think a hike of 100% during a period of low inflation is pretty silly. The hypothetical question served to make a very important point. Your argument that it is always the fault of the consumer falls over when the injustice of the hike is high enough. You didn't bat an eye lid at 100% so it was important to establish if there was a limit. I think you and your friend have begrudgingly accepted that there should be limits and it shouldn't just be a free for all to increase profits to punish the naughty lazy customer.
Remember I also stated £100, £10000 and £100000 and I still don't really know where you draw the line.

So there are 2 issues really.
1. The size of the price hike which can actually be unjust. Only a fool would suggest otherwise.
2. The issue of auto renewal which is indeed the responsibility of the customer, a point I actually agreed with in the first statement and therefore redundant for anything other than the purpose of straw man arguments. Even so there should be some protection for anyone who may not manage to read the renewal for whatever reason. Why because I don't think the punishment for such a minor crime should be a fine of potentially thousands. I for one think that's disproportionate.

Now your whole thing about agreeing. Maybe in the specific legal sense of the insurance industry but if you want someone's agreement on a financial matter in any modern industry you would require some form of confirmation before going ahead with taking someone's funds. Not just sending some mail to some address. If you did this in a properly regulated industry such as software development you would be hung out to dry.

Mannion

You're accepting the new price by paying the premium.

You can always change to non auto-renew at any point as well, just call them and tell them.

Anyone who just lets their policy auto-renew without checking the prices etc has only their self to blame, and has no points to complain about, as it's their own responsibility to check these things

I know this is your standard response but the problem with it is the same equivalent rules could be used to justify financial fraud. So not a strong defence really and I don't think its reasonable.

There is absolutely no reason to make the checking of a price change 100% the users responsibility. Anyone being skimmed or directly raided can check there accounts and then do something about it. That doesn't make it morally right or in this case legally right. The amount leaving your account should be justifiable and the increase should not be bewilderingly out of scale with what is reasonable. There is no excuse for any modern business hugely changing someone's contract conditions without receiving a definitive confirmation from them that that is what they want. The fact that thousands of people have paid what they didn't want to pay proves that the system if fatally flawed and unjust.

Again why not at the very least recorded delivery and then phone the customer to check. Too much work for your hard earned cash. WHY NOT? Virtually every other industry does this. I have never altered a letter on any software contract without the explicit consent of my client. If I could just send out letters with any changes I liked on them. I would only need a few failed responses, lost bits of mail, a tiny percentage of business and I would be very rich indeed.

The reason why people from other industries are shocked by this and caught out by this is because it makes no sense. Anyone unaware of this lazy way of doing business combined with the ludicrous price hikes is absolutely astonished "They do what?". "That's a bit underhand". "Rip off" were the first three responses I got from work colleagues.

Just because its the current system doesn't make it right, or efficient or fit for purpose.

This is my opinion. Your ludicrously over confident response was just yours too.

Mannion

I agree but why the immediate attacks. and also why not read the full comment and answer it in the correct context. I've seen a lot of what I would term bullying on this issue in several similar threads. Why?

tomtontom

You keep talking about vulnerable people. I'm one of those people, I can go for months at a time when I cannot deal with financial matters. Auto renewal works for me, it means that I can be sure I have insurance in place whatever happens health wise.

In what way is software development a regulated industry? The only regulation I can think of is contract law, which applies equally to the insurance industry. Unless you can explain otherwise I would say there is far more regulation in insurance. Is there any statute or official ombudsman for software development?!

takman

Instead of putting a lot of effort into getting people to agree with you on an Internet forum you should have put that effort into getting the best price each year!.
If you don't like auto-renew you can cancel it anytime during the year. Then all you need to do is make a note of when your renewal is and compare prices and switch. You can't say you didnt know the price because even if you didn't receive any letters, the money was still taken from your account.
I like how the current system works and I like people like you that pay the higher rates to subsidise people like me who want the cheapest premiums.
I don't want insurance companies ringing me up or sending me letters by recorded delivery at renewal that adds to the cost.

The bottom line is that people need to be responsible for their own financial situation. You have realised that you have come up short in this area and are looking for someone to blame!.