Insurance renewal price

se2020

I thought insurance companies had been banned from offering cheaper prices to new customers than renewal customers?

I've just gone onto my current insurers website and they are quoting me £50 cheaper than the renewal price they have sent me.

If I go onto a comparison site they are quoting nearly £100 less.

My renewal price is just over £100 more than last year. The price on the comparison site is within £2 of last years premium.

What's going on there then?

Bigwheels1111

Just get them to match it and move on.

HillStreetBlues

That law isn't working.
My renewal  well over double last years price.
Took out same policy with them as new customer  via comparison site (same way I bought it last year)  got same price as last year.

CliveOfIndia

They have to offer the same price to new/existing customers for policies bought through the same channel.  So this means they can offer different prices if you buy via an aggregator site, online via their own website, or over the phone.  So there can often be some significant differences in price.

I will admit I'm not sure if different aggregator sites count as a different channel.  For instance, is Compare The Market classed as a different channel to Go Compare?  Not sure on that one, but yes, the rule about charging the same price specifies the "same channel" clause.

DullGreyGuy

se2020 said:

I thought insurance companies had been banned from offering cheaper prices to new customers than renewal customers?

I've just gone onto my current insurers website and they are quoting me £50 cheaper than the renewal price they have sent me.

If I go onto a comparison site they are quoting nearly £100 less.

My renewal price is just over £100 more than last year. The price on the comparison site is within £2 of last years premium.

What's going on there then?

Last year... did you phone them to discuss the quote/negotiate it down and buy over the phone?

As above, the regulations allow differential pricing by channel (with aggregators being a different channel to their own website).  Its also by product too and so potentially you were being offered a renewal on last years product whereas the new business quotes you've gotten could be a new product. What I dont know, having not been doing consumer insurance for a few years, is how much difference is required to be able to class it as a different product. 

se2020

I've rung them this morning and they will match the price (from themselves) on the comparison site.

I've also had quotes from different insurers that are substantially cheaper so I'll be switching insurers anyway.

If they had just quoted me the same price as last year I wouldn't have bothered shopping around so they have shot themselves in the foot by adding £100 onto a premium when they can actually do it for the same price anyway.

DullGreyGuy

se2020 said:

I've rung them this morning and they will match the price (from themselves) on the comparison site.

And so, if you had renewed, then next years price would have had to be no more expensive than a new telephone customer. Hence if you went back to the aggregators again the price there would have been cheaper again. 

Grumpy_chap

DullGreyGuy said:

As above, the regulations allow differential pricing by channel (with aggregators being a different channel to their own website).  Its also by product too and so potentially you were being offered a renewal on last years product whereas the new business quotes you've gotten could be a new product. 

That all sounds like a great big fudge and defeats the whole purpose of the legislation which I had understood was to protect those that, for whatever reason, were unable to shop around.

DullGreyGuy

Grumpy_chap said:

DullGreyGuy said:

As above, the regulations allow differential pricing by channel (with aggregators being a different channel to their own website).  Its also by product too and so potentially you were being offered a renewal on last years product whereas the new business quotes you've gotten could be a new product. 

That all sounds like a great big fudge and defeats the whole purpose of the legislation which I had understood was to protect those that, for whatever reason, were unable to shop around.

Which is why I pointed out that I dont know the level of change required to be a "new product" under the regs. 

There is a notable overhead in maintaining old wordings and hence traditionally most direct insurers will update everyone each year onto the new wordings. 

Barkin

DullGreyGuy said:

se2020 said:

I thought insurance companies had been banned from offering cheaper prices to new customers than renewal customers?

I've just gone onto my current insurers website and they are quoting me £50 cheaper than the renewal price they have sent me.

If I go onto a comparison site they are quoting nearly £100 less.

My renewal price is just over £100 more than last year. The price on the comparison site is within £2 of last years premium.

What's going on there then?

As above, the regulations allow differential pricing by channel (with aggregators being a different channel to their own website).  Its also by product too and so potentially you were being offered a renewal on last years product whereas the new business quotes you've gotten could be a new product. 

I've had this with insurance through AA (I think, but don't take it as gospel).

Renewal quote was higher than I thought it should be. When I rang them to query it, I was told that as they're only brokers they simply sent me the renewal  details using the same insurer as last year. Sure enough, when the nice lady ran a new quote for me, it came out cheaper, but with a different insurer to the previous year. 

DullGreyGuy

It would be unusual for a broker not to rebroke the business each year. 

The rules apply to those setting the price, with an intermediary that may well be the insurer but many brokers have authority to make alterations to the price or sacrifice their commissions to reduce the price and in those cases the rules apply to them to the extent that they can change the price.

You can always read the rules at https://www.handbook.fca.org.uk/handbook/ICOBS/6B/?view=chapter