Car and home insurers face ban on charging existing customers more than newbies - MSE News

gordyp

Sandtree said:

 many have no idea if the company they've bought from is a broker, MGA or insurer or a white label of any of the above. 

Very true. Many of them do little to make it obvious they are just brokers.
Even the comparison sites give the impression they are searching the insurance companies directly.

Sandtree

gordyp said:

Yahoo_Mail said:

Takmon said:

Another change that if successful will slightly reduce the price of people too lazy to do any kind of comparison but increase the price for people who make the effort to shop around. I don't see why the financially lazy should have their hand held with measures like this.

Precisely.  But then Martin was a big fan of getting rid of bank charges, which were not too dissimilar, the stupid subsidising the savvy.

convolvulus said:

@Sandtree
I take your point. But insurers will find some angle similar to the way mobile service providers did with roaming charges - a profitable element that escapes competitive pressure. Up till now that need has been fulfilled by renewal pricing. If that is taken from them they will innovate to find an alternative. Maybe there will be an increased excess if the house has been vacant for over 10 days, or something.

I guess they will also look to provide more portfolio products to cover house, cars, breakdown, kids at Uni, etc, with bundle discounts, until it becomes just too opaque or inconvenient to change provider.

OMG talk about petty. So you price around every year! Some don't for one reason or another. Big deal. Get over it.

Every year? In my day prices were reviewed monthly and that was a lifetime ago. Peak Tactical prices were reviewed daily and non peak weekly. If those hadn’t all moved down a step I’d be highly surprised 

Alfie_J

The main problem is not the price hikes but the auto-renewal, the official name being Continuous Payment Authority (CPA).
This is often set on by default and is always in the small print. You can ask the insurer to cancel this CPA but you can never seem to do it online and they insist you call them up. Of course, that takes forever, especially if you select the 'cancel' option in their call answering menu - which immediately puts you to the back of the queue. It's taken me 30 mins or more in the past to do this. It's an even worse nightmare if you try to cancel after they process the renewal fee to your card!
I don't know how they can do this in any case, the GDPR rules state that you need to give your consent to opt-in to any yes\no selection and I believe there are other regulations that prevent companies from storing your credit\debit card details?
It really is about time this 'under the radar' practice was stopped.

Sandtree

Alfie_J said:

The main problem is not the price hikes but the auto-renewal, the official name being Continuous Payment Authority (CPA).

Official name for it is auto-renewal or assumptive renewal.

Continuous Payment Authority is the ability for a merchant to take additional payments from a payment card (debit, credit or charge) without explicit approval from the card holder. This is used by insurers but also many other organisations (eg Paypal).

Auto-renewals, at least in my day, were more commonly paid for using Direct Debits than CPAs 

Cancelling the CPA, which is done by contacting your card issuer, does not cancel the auto-renewal, it simply stops their ability to take payment which is normally done after the renewal has occurred. This means you then have insurance and a debt which if you don't settle will result in the policy being voided for non-payment and you then have to declare that for life.

The FCA does fully support auto-renewal, it has driven down the number of uninsured events, but they have already stated that they will look into how easy it is for people to cancel 

brewerdave

Just had a renewal quote for my wife's car - 64% increase on last year! Phoned them to "give them a chance" - only a small decrease offered . When I told them that I'd be going elsewhere the agent said that " You can't expect to get a new customer deal every time " - oh yes I did - got the premium down below last year's price with a couple of visits to comparison sites.
With this proposed change all the "savings" I have made over the past 15 years or more ,will be a thing of the past 

_Adrian_

My guess is that little will change given the caveat relating to changes in risk profile.  It's my experience that insurers will take almost any event as a change to risk if it allows them to hike the premium.

For example: About a year ago, my car was parked in a hotel car park. While I was away from the hotel, another guest caused some minor damage to the rear of my car; that guest then contacted their insurer and made all the appropriate arrangements for a claim to be processed against their policy.  Other than contacting my insurer to notify them, I had no involvement and thought nothing more of it after the repair work was done.
Roll on a few months, and my partner's insurer, having already renewed her policy, send her a demand for a further £98 for a change [increase] to risk and threatening to cancel her policy.  It transpired that, as I am a named driver on her policy, the increased risk was ostensibly as a result of the minor scrape that my car suffered previously.  While I accept that insurance policies invariably require you to notify them of anything that might affect your policy and that omission was an oversight on our part, what I have some difficulty with is:

1. How the incident with my vehicle, which was clearly not my fault, increases risk and
2. How my partners insurer knew about said incident.

OK, so my second point is rhetorical in that I'm fully aware that insurers share information.  However, since they do share information, that surely makes the notification clause in policies somewhat redundant?

If the FCA are going to allow the risk profile clause mentioned in the article, then I think they will also need to provide guidance on how it is implemented, otherwise I believe it will be abused by insurers.

Sandtree

brewerdave said:

With this proposed change all the "savings" I have made over the past 15 years or more ,will be a thing of the past 

Not really, the requirement is simply that your current insurer provides you with their new business price at next years renewal. That doesnt mean that by shopping around you won't be able to do better and similarly that your current insurers wont then undercut it.

There are a few "Martin" type consumer champions who are actually not liking these proposals and instead felt that FCO should instead of forced insurers to do more to promote customers shopping around each year with just some extra protections for the vulnerable who may be unable to do so. 

dunstonh

Alfie_J said:

The main problem is not the price hikes but the auto-renewal, the official name being Continuous Payment Authority (CPA).
This is often set on by default and is always in the small print. You can ask the insurer to cancel this CPA but you can never seem to do it online and they insist you call them up. Of course, that takes forever, especially if you select the 'cancel' option in their call answering menu - which immediately puts you to the back of the queue. It's taken me 30 mins or more in the past to do this. It's an even worse nightmare if you try to cancel after they process the renewal fee to your card!
I don't know how they can do this in any case, the GDPR rules state that you need to give your consent to opt-in to any yes\no selection and I believe there are other regulations that prevent companies from storing your credit\debit card details?
It really is about time this 'under the radar' practice was stopped.

As mentioned higher up, CPA has nothing to do with auto-renewal.  CPA is just a method of payment.  You could equally replace with that direct debit back in the days where that was more popular.

GDPR has nothing to do with auto-renewal.   
 Whilst I don't particularly like auto-renewal myself, you cannot refer it to as "under the radar".  It is very obvious as long as your read your cover letter that tells you what to do next if you do or do not wish to renew.
And for every person that moans about auto-renewal, there is another that has benefitted from it. 

jeffkey1

I think this is a really bad idea who ever pushed for this. As mentioned punishing the savvy who shop around over the too lazy to bother.

What worries me is this might start to apply in other areas. Like Broadband, Electricity, Gas, Sky TV.   No cheaper offers to new customers than existing. If so this whole MSE site will be redundant. 

Sandtree

But in theory, you can feel good that your insurance/electricity etc is no longer being funded by a bunch of 80-90 year olds who are paying way over the odds because they aren't "savvy"