Ripoff Car Insurance on Change of Vehicle

ajwid01

Good day,

I have been insured by Direct Line on multi cars for a number of years. Always shop around/haggle every year, as the renewals are always higher than doing a 'New Quote' for the same vehicle/everything else the same, year on year.

I looked into switching cars for wife this week, and did a quick 'Confused.com' trawl of providers, just to see if the ballpark figures for cover were not outrageously different. (It's the same brand/model/car, same CC, slightly newer/better spec, 4WD.)  I was pleasantly surprised that all the quotes from 12+ providers came back cheaper than what I paid in December for 12-month comprehensive policy. On that basis, I didn't expect there to be a monumental uplift set of charges to switch the vehicle on the policy.

How wrong could I be??

Direct Line took £309 for a 12-month policy in December. Switching to the very similar car, they wanted an additional £211 for the remainder of the 12-months! Making it over £500 for the year of cover.

I discussed the oddity of this at length. After getting nowhere, I decided that maybe Direct Line had a weird risk weighting for just THIS car, that no other provider did. Thereupon, I resolved that I would just take my business elsewhere. However, just before leaving, I did a "New Quote" on their website, like-for-like cover (down to Protected NCD, Excess etc.). The new quote on their site for the new vehicle??  £296.  Even cheaper than the £309 I paid for the existing vehicle in December. So where on earth do they get the additional £211 from??

The operator tried every-which-way to match the deal, but couldn't get anywhere near on the existing policy.

I asked if I could just cancel the current one on the day I switched vehicle, and then buy the new policy at £296.  I apparently could - but they would sting me with a £50 cancellation fee. Although the operator looked to see if they could waive the fee, the scenario apparently didn't fit their limited list of approved criteria for waivers.

So: I think they are just geared up to ripping people off for switching cars mid-term, hoping people would just lump it and take the hit. Feels like very questionable practice to me.

I have decided to terminate my approx. 7-year repeat customer relationship with Direct Line as a result, and will be removing my other business with them at renewal points in the upcoming months (2nd car, home insurance etc.)

I just thought I would write about this, in case someone has any idea how they arrive at this logic. I also wondered if I could refer them somewhere, like an Ombudsman or something, as I don't like companies taking advantage of people like this.  I remember when I was a young man, and got stung on changing cars. It was more of a hassle to lose the NCD I was building up at the time, so just paid inflated premiums and then switched provider the following year.  Now: with 21+ years NCD on 3 different vehicles/policies, I really have no care.  I will just cancel, move on, and never give Direct Line my business again, just on principle.

Thoughts, comments, anyone?

dunstonh

I also wondered if I could refer them somewhere, like an Ombudsman or something, as I don't like companies taking advantage of people like this.

The ombudsman will not get involved with pricing unless there is an error or there is discrimination.

 I did a "New Quote" on their website, like-for-like cover (down to Protected NCD, Excess etc.). The new quote on their site for the new vehicle??  £296.  Even cheaper than the £309 I paid for the existing vehicle in December. So where on earth do they get the additional £211 from??

The "new" quote would get new customer early year discounting.   You don't get early year discounting any more as you have been with them for so long.

Thoughts, comments, anyone?

They offered their price.  if you don't like it then you go elsewhere. It really is as simple as that.

ajwid01

I don't think that really explains it properly.
New Customer / Early Year discounting might explain a bit of an uplift. But 80+% uplift.
Nope. Don't think so.

N.B. I have re-insured every year, even when the existing provider has been 10-15% more expensive than switching - just because I like loyalty. When loyalty is penalised so heavily (in this case £250+... 80+%) that is pushing it!

MalMonroe

ajwid01 said:

I don't think that really explains it properly.
New Customer / Early Year discounting might explain a bit of an uplift. But 80+% uplift.
Nope. Don't think so.

N.B. I have re-insured every year, even when the existing provider has been 10-15% more expensive than switching - just because I like loyalty. When loyalty is penalised so heavily (in this case £250+... 80+%) that is pushing it!

Don't be loyal. That IS one thing Martin Lewis is always saying. It costs too much to be loyal. Nobody cares anyway. I've always had to pay extra if I've changed any car insurance mid-term. I just accept that's what happens because that is what happens. And the annoying thing is, all insurance companies, without exception, will make 'admin charges' for very small changes. It's just what they do. We customers can do very little because it's compulsory to have car insurance and although we may haggle as much as we can - or we should do - there's always a limit. My car insurance for this year is £178 fully comprehensive and I'm an older driver. I did always wonder who went with Direct Line because their prices are always ridiculously high. 

greyteam1959

Strangely enough I have just moved TO Direct Line as they were over £100 cheaper for a better policy than LV who I had been with for about 3 years.

ajwid01

One thing about Direct Line is, there aren't (allegedly) any Admin Charges for policy amendments. Maybe they have carefully hidden them in this £200+ surcharge for changing vehicle to the same risk vehicle....

maisie_cat

I think it's a way of just making more money. We changed our car a month into a policy, I told A plan what car we were changing to and asked them to ensure that the insurance company wouldn't want a fortune to change. Paid £300 for the old car then a month later they wanted another £220 for a car several insurance groups lower. It was cheaper to change to a new policy but we did feel ripped off and that A plan were incompetent. The insurance industry is quite lean so I guess any chance to charge customers.

Sandtree

ajwid01 said:

One thing about Direct Line is, there aren't (allegedly) any Admin Charges for policy amendments. Maybe they have carefully hidden them in this £200+ surcharge for changing vehicle to the same risk vehicle....

What you are suggesting would be a serious breach in regulations if they were charging and admin fee but not disclosing it... insurers charged them for donkeys years but when the ICOBs came in etc over a decade ago any fee had to be explicitly separated from premium.

Now in a certain sense you are right, if no explicit fee is being charged then every premium paid has to have higher ops costs included as clearly staff still need to be paid etc but that would be as true for the annual premium as it is the adjustment premiums.

The OP ultimately can log a complaint if they are unhappy, its not unknown for error in premium calcs to be made and front line staff are simply given a price without explanation. They would however most likely get back a letter explaining about it being an annual policy and its the OP's choice to make the change and its up to them if they want to accept, cancel or not change vehicle etc.

HansOndabush

All insurers load change of car part way through a period of insurance. They know they have you and you have little options other than to suck up what they offer as the 'revised' quote. It's not right but it is in no way unique to Direct Line; I've had similar experience with just about every insurer I've had.

cajef

Changed my car last November half way through insurance year, same make and model but latest version, contacted Direct Line with change of vehicle no admin charge and received a small refund on my policy as new car slightly cheaper to insure.

molerat

Changed my car 6 months into the policy to a larger more powerful new car, The Tank as my daughter calls it, and DL charged £18 extra.  Next renewal was within £10 of the cheapest available "Bert round the back of the Dog and Duck" basic policy on the comparison sites and I will be getting a chunk of that back at next renewal due to lower mileage.