House insurance "overcharge" settlement - good offer or total bamboozle? 13 March 2022 at 4:20AM in Reclaim PPI & other insurance 3 replies 132 views

Jameo85

Hello everyone, I'll try to keep this short...

My mum's home insurance auto renews every year. She's elderly/disabled and doesn't think to check these kinds of things, but my sister and I have recently taken over handling all her financial stuff and after running some quotes online we found she's been paying well over the odds for home insurance for sticking with her provider.

She's paying roughly around £70 a month, when a new quote with a different provider comes in around an average of £30. Same level of cover, all past claims applied etc. (In most cases she'd actually be getting more cover with another company.)

Raised the issue with her current provider and they got back to me pretty quick offering an apology for not supporting her/checking the policy met her needs. They said their premiums calculator was correct but offered an apology by way of a settlement figure of around £600. Which includes the 8% interest and a £100 for the inconvenience. So I'm not entirely sure what the other £450 is based on, since they're claiming they're not wrong about their premiums.

Sounded great initially, but we've been discussing it with a neighbor this weekend and I'm wondering if my mum is potentially getting short changed again....

We ran a quote directly on her insurer's website for said neighbour's properly two doors down, pretty much identical houses, and we applied all the same details for claims and the same level of cover as my mum's paying for. Quote came back at £27 a month!!! (Similar ballpark for what new providers are offering mum.)

So, now I'm wondering why she's being charged £70 for the same levels of cover. And if she's been paying around £45 above what the same house/household would pay each month for God knows how many years, then £600 is a drop in a bucket for how much she's potentially been overcharged.

She's been auto renewing since 2015, and from what I can see the price has increased every year by around 2-4% and there was no really dramatic jump after making a couple of large-ish claims in 2018.

They're claiming the premium was calculated correctly, and that the £600 is in acknowledgement of the fact they didn't do more to support my mum, but I don't know how they got to that figure and it just all strikes me as strange right now.

I'm just wondering what to do here because I feel like maybe I'm being lead down the garden path into thinking this is a good settlement, when potentially if there's rounds for a claim for being overcharged on her premiums, it's obviously going to be more than they're offering now.

Can anyone advice on if she should accept the £600 or could she/we be being palmed off because they know they potentially could owe my mum a hell of a lot more for overcharging her year on year?

Could we accept the £600 for failing to support her as a disabled/elderly person, and still refer the complaint to the ombudsman to dispute the inflated premiums?

Any advice would be helpful. Thanks for reading.

Jameo85

Sorry if this is in the wrong sub forum.

[Deleted User]

The FOS are categorically not going to look at complaints about people choosing not to compare prices and start making rulings / changes to the offer of compensation.

Until the recent rule change about not offering better deals to new customers, there was no obligation at all to give renewals a cheaper price and most, if not all, have been sending out letters on renewal advising you that you can shop around. Whatever the state of your mother's health, if she chose not to compare prices and switch, then the insurance firm have done no wrong and the £600 is a significant win given no wrong doing by the insurer.

You can't simultaneously complain that she was disabled/elderly and a victim while at the same time you have only just started helping her with finances - if she was incapable (which it sounds like she isn't), then you should have had some form of power of attorney years ago. If you don't have that now, because she's still well, then you have no argument that they have done wrong just because your mother chose not to compare the market.

Take the payout and don't clog up the FOS with another case which will take 2 years to resolve and which could result in the offer being withdrawn

dunstonh

They're claiming the premium was calculated correctly, and that the £600 is in acknowledgement of the fact they didn't do more to support my mum, but I don't know how they got to that figure and it just all strikes me as strange right now.

The payment is a goodwill gesture.  it's not a calculated figure.

I'm just wondering what to do here because I feel like maybe I'm being lead down the garden path into thinking this is a good settlement, when potentially if there's rounds for a claim for being overcharged on her premiums, it's obviously going to be more than they're offering now.

There is no overcharging though. 

As mentioned above, the FOS will not rule in her favour about being overcharged.   They offered their premium and it was accepted. The failure to shop around is not their fault.   However, she is getting lucky as vulnerable customer guidelines are currently in focus and goodwill gestures around vulnerable customers are likely to get more than they would do on a complaint than in normal times.  It is also worth noting that goodwill gestures can be withdrawn if the case is referred to the FOS.   In this case, the payout is very similar to the FOS fee.