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MSE News: Car and home insurers to be banned from charging existing customers more than newbies

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Sandtree said:
    isasmurf said:
    Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 
    Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 
    Never heard of happy hour? You join with a low price and then after a time the cost goes up
    Of course I have. Wasn't my point though. Trust is important when conducting business. Seems if many businesses these days adopt an American culture of profit first, screw the customer. Simply because they can. 
  • Sandtree
    Sandtree Posts: 10,628 Forumite
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    Insurance companies take advantage of those who don’t shop about for deals (mainly the elderly).

    Having owned a car for almost 20 years. I have only used 6 different insurers in this time. One time I stayed with the same insurer for two years as I bartered the new customer quote and the free Karcher washer. Got that £25 gift card.

    Im surprised that the FSA have not commented on the high APR some insurers charge. Can people pay for their insurance on a credit card?

    I pay my car insurance in a single payment as fortunately it’s due in March and use the council tax ‘free months’ of payment to pay
    I take exception with the "mainly the elderly". The argument for doing this is protecting vulnerable customers (and in part to stop unrealistically low premiums for some too) but at no point has any statistics been produced on vulnerable customers (which has to include those financially vulnerable etc too). Its rather insulting that its only presented data on under 65s and over 65s... you dont suddenly lose your marbles at 66 and if they think they do then they should be worried about the board members of their insurers.

    The Food Safety Agency are unlikely to comment on insurers APRs, the FCA hasnt commented. Yes people can pay by credit card, and many of those charging the highest APRs are not insurers but brokers etc and often then its not the broker charging the APR (they cannot afford to provide the loans) but a separate finance company. The reality is that a 12 month  £400 loan is tiny and needs a reasonable APR to cover the admin etc, it cannot be balanced out with those with £20,000 5 year loans etc.

    Look at Natwest, they won't even do a loan as small as £400 and for a £1,000 loan its 24.9% and so comparable or higher than most charging interest on insurance loans
  • ThisnotThat
    ThisnotThat Posts: 500 Forumite
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    isasmurf said:
    Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 
    Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 
    If a year had passed between me ordering the first round and the second, I'd be very surprised if the price hadn't gone up between rounds.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    isasmurf said:
    Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 
    Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 
    If a year had passed between me ordering the first round and the second, I'd be very surprised if the price hadn't gone up between rounds.
    Yet a new customer at the bar is charged a different price. 
  • ThisnotThat
    ThisnotThat Posts: 500 Forumite
    500 Posts Name Dropper
    isasmurf said:
    Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 
    Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 
    If a year had passed between me ordering the first round and the second, I'd be very surprised if the price hadn't gone up between rounds.
    Yet a new customer at the bar is charged a different price. 
    Promotions to attract new customers arent particularly unusual.

    Not really the point though, is it?  You were claiming that it would be unusual for a price increase to happen between rounds which is true as you'll generally be sat in a bar for a few hours, not a few years.  Hardly a good comparison.
  • daveyjp
    daveyjp Posts: 13,549 Forumite
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    Go back 30 years, buying insurance was a pain. It was a broker, or a dozen phone calls to get a price, it took hours.

    The insurance market is now one of the most open, free markets we have.  Comparing prices is easy, deciding which one to go with is easy, changing providers is easy.

    If people are happy to pay for being lazy good for them, I am not lazy, I shop around so I shouldn't have to pay an apathy payment.

  • naedanger
    naedanger Posts: 3,105 Forumite
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    daveyjp said:
    Go back 30 years, buying insurance was a pain. It was a broker, or a dozen phone calls to get a price, it took hours.

    The insurance market is now one of the most open, free markets we have.  Comparing prices is easy, deciding which one to go with is easy, changing providers is easy.

    If people are happy to pay for being lazy good for them, I am not lazy, I shop around so I shouldn't have to pay an apathy payment.

    I am glad things have got easier over the last 30 years, and this change means things will get easier still.
  • kaMelo
    kaMelo Posts: 2,858 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    naedanger said:
    daveyjp said:
    Go back 30 years, buying insurance was a pain. It was a broker, or a dozen phone calls to get a price, it took hours.

    The insurance market is now one of the most open, free markets we have.  Comparing prices is easy, deciding which one to go with is easy, changing providers is easy.

    If people are happy to pay for being lazy good for them, I am not lazy, I shop around so I shouldn't have to pay an apathy payment.

    I am glad things have got easier over the last 30 years, and this change means things will get easier still.
    Why will it get easier? Staying put is still unlikely to get the best price even after this is brought in.

    I don't condone price gouging but seriously, it has never been easier to save money on energy, insurance, phone/broadband etc.all the tools are available yet there is always a constant stream of people whining about their situation but not prepared to help themselves out of it.
  • naedanger
    naedanger Posts: 3,105 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    kaMelo said:
    naedanger said:
    daveyjp said:
    Go back 30 years, buying insurance was a pain. It was a broker, or a dozen phone calls to get a price, it took hours.

    The insurance market is now one of the most open, free markets we have.  Comparing prices is easy, deciding which one to go with is easy, changing providers is easy.

    If people are happy to pay for being lazy good for them, I am not lazy, I shop around so I shouldn't have to pay an apathy payment.

    I am glad things have got easier over the last 30 years, and this change means things will get easier still.
    Why will it get easier? Staying put is still unlikely to get the best price even after this is brought in.

    I don't condone price gouging but seriously, it has never been easier to save money on energy, insurance, phone/broadband etc.all the tools are available yet there is always a constant stream of people whining about their situation but not prepared to help themselves out of it.
    It will get easier because I won't need to switch so often because normal competitive pressures will be at play. (I won't bother switching if my existing provider remains reasonably competitive, provides me with a reasonable service and, as far as I can tell, retains a reasonably good reputation.)
  • Sandtree
    Sandtree Posts: 10,628 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    naedanger said:
    kaMelo said:
    naedanger said:
    daveyjp said:
    Go back 30 years, buying insurance was a pain. It was a broker, or a dozen phone calls to get a price, it took hours.

    The insurance market is now one of the most open, free markets we have.  Comparing prices is easy, deciding which one to go with is easy, changing providers is easy.

    If people are happy to pay for being lazy good for them, I am not lazy, I shop around so I shouldn't have to pay an apathy payment.

    I am glad things have got easier over the last 30 years, and this change means things will get easier still.
    Why will it get easier? Staying put is still unlikely to get the best price even after this is brought in.

    I don't condone price gouging but seriously, it has never been easier to save money on energy, insurance, phone/broadband etc.all the tools are available yet there is always a constant stream of people whining about their situation but not prepared to help themselves out of it.
    It will get easier because I won't need to switch so often because normal competitive pressures will be at play. (I won't bother switching if my existing provider remains reasonably competitive, provides me with a reasonable service and, as far as I can tell, retains a reasonably good reputation.)
    Your premium can still become highly uncompetitive. If your insurers decide they don’t like your car or postcode any more they can still ramp your premium to high levels just as long as they are doing the same to new businesses. 

    What could be interesting is if a large multi brand company decided to make certain brands a true cash cow. Intentionally over price new business to enable them to further increase the back book prices accepting little new business coming in as a consequence  
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