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

MattMattMattUK

IftiBashir said:

This got me. 
Im 42 years of age, with 17 years no claims discount on my main car. No claims. No convictions - the ideal insurance customer, right?
Vehicle is a BMW X5. Located in East London (so used to a higher premium!).

Been with my current insurer for that last 2 years. Last years price was £731.
This year my renewal is £1460!
They applied a discount for me and bought it down to £1408!

So I shopped around and cant find any cheaper. The rest are £2k and beyond! I don't understand it. This was supposed to make prices fairer, werent they?? Mine have sky rocketed for no reason at all!
Looks like I will have to suffer the renewal price

They were supposed to make pricing the same for new vs existing customers, fair is subjective and there will be a reason that the costs have increased. The increase could relate to the higher rate of theft of SUVs which has been happening over the last year or two, or an increase in general vehicle theft in your area, potentially a job change (my insurance went down nearly 30% when I went from an employee to a company director), it went up 40% when I moved 1.6 miles because they had no crime data for the new address as it was new build, then went back down 35% the next year. You might also find that they previous price was an attempt at the insurer to grab market share, but as all other quotes are over £2k they can continue to hold market share whilst increasing prices. 

dunstonh

Does anyone know how to complain to the FCA if a company is still doing this? 

You don't.  You complain to the firm first.  Then the FOS if you disagree with the outcome.  

Got my renewal for house insurance through via email, I did my normal routine of checking the comparison sites in the recommended order as per MSE, and also checked my current provider as a new customer quote.
The new customer quote came through cheaper than the price quoted on my email. 

Some caveats you need to be aware of.
1 - Insurers often issue multiple versions of their policies for different distribution channels.   So, comparison site A may have a different version that is cut down in cover and cheaper than broker B.     
2 - Prices are set differently for different distribution channels.  e.g. phone will have one price, brokers/comparison sites will get a variety of prices, website different again.   
3 - A distribution channel may elect to take a different commission amount from another distribution channel.  That will create further price differences.

The rules are that they cannot price differently for the same policy via the same distribution channel.  They can price differently for a different version and/or via a different distribution channel.

DullGreyGuy

Beki88 said:

Does anyone know how to complain to the FCA if a company is still doing this? 
Got my renewal for house insurance through via email, I did my normal routine of checking the comparison sites in the recommended order as per MSE, and also checked my current provider as a new customer quote.
The new customer quote came through cheaper than the price quoted on my email. To ensure everything was the same I went through all the questions in the renewal via the providers site, and double checked all answers matched the new customer quote answers, which they did, and checked the policy was exactly the same, which it was. The newly produced renewal quote was still higher than the new customer quote. Everything the same bar the price, generated only minutes apart. Which by the FCA's ruling should not happen, but it has. It's frustrating to know that it's still happening, as a new customer I'm saving around 34% compared to the renewal price which is just crazy.
I tried to google who to complain to but was not getting any clear answers. I could complain to the company directly but they aren't likely to do much about it. 

Even if they sell the identical product across different channels they are allowed to have differential pricing by channel even for identical products.

So what is key to know is if what channel the you bought last years policy and ensure the quotes you are getting today is via that same channel - the FCA have explicitly said that Web and Aggregators are two separate channels.

There may be some complexity too... if the quotes were via confused.com but then you telephoned up to negotiate and accepted over the phone that may well have been classified as a telephone sale. So now the rules mean you cannot be charged more than a new telephone customer would be charged whereas they can be charged more than a new confused.com customer.

Add to that you may be given a renewal quote based on an old product whereas as a new customer they are giving a quote on a new product. Different products will have different pricing. 

As to a complaint, it follows normal practice. You complain to the insurer, if you are unhappy you can go to the FOS. The FOS then provide updates to the FCA

Beki88

Thank you both for your comments. The two prices I got were both directly on the companies website. The only difference was one was whilst logged in (my renewal price) and the other was not logged in (new customer price). I checked that everything answer wise was the same, and also it was exactly the same product which it was. I will send them an email now. Thanks. 

RL11

IftiBashir said:

This got me. 
Im 42 years of age, with 17 years no claims discount on my main car. No claims. No convictions - the ideal insurance customer, right?
Vehicle is a BMW X5. Located in East London (so used to a higher premium!).

Been with my current insurer for that last 2 years. Last years price was £731.
This year my renewal is £1460!
They applied a discount for me and bought it down to £1408!

So I shopped around and cant find any cheaper. The rest are £2k and beyond! I don't understand it. This was supposed to make prices fairer, werent they?? Mine have sky rocketed for no reason at all!
Looks like I will have to suffer the renewal price

I have the same issue - though nowhere near your prices!
Two years with same insurer paying less than £200. Renewal is over £300 BUT I now can't find anything cheaper via comparison sites.
Would have been better if the FCA didn't get involved. Those that used to shop around for a better deal each year, are now penalised because the FCA have helped those that couldn't be bothered (excepting that a tiny minority didn't know how to).
What's the point of comparison sites now?

DullGreyGuy

RL11 said:

IftiBashir said:

This got me. 
Im 42 years of age, with 17 years no claims discount on my main car. No claims. No convictions - the ideal insurance customer, right?
Vehicle is a BMW X5. Located in East London (so used to a higher premium!).

Been with my current insurer for that last 2 years. Last years price was £731.
This year my renewal is £1460!
They applied a discount for me and bought it down to £1408!

So I shopped around and cant find any cheaper. The rest are £2k and beyond! I don't understand it. This was supposed to make prices fairer, werent they?? Mine have sky rocketed for no reason at all!
Looks like I will have to suffer the renewal price

I have the same issue - though nowhere near your prices!
Two years with same insurer paying less than £200. Renewal is over £300 BUT I now can't find anything cheaper via comparison sites.
Would have been better if the FCA didn't get involved. Those that used to shop around for a better deal each year, are now penalised because the FCA have helped those that couldn't be bothered (excepting that a tiny minority didn't know how to).
What's the point of comparison sites now?

You still see the cheapest company for you this year which may or may not be your current insurer

The FCA acknowledged it was likely to result in averaging of premiums between those who shop around each year and those that didnt but they felt it was worth doing to protect those that dont shop around which has a strong correlation with the age of the customer. 

RL11

DullGreyGuy said:

You still see the cheapest company for you this year which may or may not be your current insurer

The FCA acknowledged it was likely to result in averaging of premiums between those who shop around each year and those that didnt but they felt it was worth doing to protect those that dont shop around which has a strong correlation with the age of the customer. 

Interestingly I just noticed the insurer I am with, was not in the comparison sites, so I tried a new quote direct with them and they quoted £475!! So renewal is considerably less than a new quote - albeit renewal is considerably higher than last year. Thanks FCA!

DullGreyGuy

RL11 said:

DullGreyGuy said:

You still see the cheapest company for you this year which may or may not be your current insurer

The FCA acknowledged it was likely to result in averaging of premiums between those who shop around each year and those that didnt but they felt it was worth doing to protect those that dont shop around which has a strong correlation with the age of the customer. 

Interestingly I just noticed the insurer I am with, was not in the comparison sites, so I tried a new quote direct with them and they quoted £475!! So renewal is considerably less than a new quote - albeit renewal is considerably higher than last year. Thanks FCA!

Insurers often price by channel and web and aggregators are seen as different channels; they can also vary the product as well.

The FCA rules allow that pricing differentiation to continue and so your renewal quote cannot be more than what they would charge a new customer via an aggregator (assuming thats how you bought it originally) however it could be more expensive than a new customer quote over the telephone (though its normally Aggregator < Web < Phone)