Motor insurance renewal warning

TeachersPensionNovice

I thought I'd post a story about my recent motor insurance renewal process as a warning to other forum members. I won't name the company as that has legal issues, and I doubt their behaviour is unique. I've already had one thread deleted because I named them.

This is how my renewal process proceeded

1) My auto-renewal preference was turned off. I'm still in the process of investigating how this happened with the company in question, but it's possible my credit card company had something to do with it. The important thing to note is that it was done silently. I received no communication indicating that auto-renewal had been turned off.

2) About a month ago I received a renewal notice offering a good price. As I thought I had auto-renewal, I took no action. However, if I had read further down the email I would have found that they were asking me to call them before my policy expired. This was the fourth paragraph down, each one down being in a smaller font.

3) I received no more communications from the company until my cover expired a month later. When I called to renew, my policy was now over £100 more expensive than the renewal quote.

When my policy auto renewed the previous year I received a number of emails in the month before it renewed. My theory is that this company, and probably others, deliberately reduced their communications to a single email, hoping that I would miss the significance and fail to renew, hence enabling them to charge me more.

My complaint to the company is that:

1) Companies should communicate when auto renewal has been turned off and for what reason.

2) There should be at least one communication in the week that a policy is due to lapse stating that the policy will lapse. I received no communication warning that my policy was about to lapse.

I'll post again if I get anywhere. 

TeachersPensionNovice

Good for you! I don't think it's too much to ask for them to send reminders. Unfortunately, my father died this year and I've been dealing with a tsunami of sadmin. Occasionally, things get missed. I turned on auto renewal as a way to reduce admin. You have to admit that silently turning that off is unhelpful.

HillStreetBlues

Wonka_2 said:

@TeachersPensionNovice before casting conspiracy theories you need to be clear how the auto-renew was 'turned off'. If it was a credit card issue it would be more likely to be a payment failure when they tried to charge the card and would be communicated accordingly.
ase and this is no different from many other goods/services.

It won't be anything to do with CC, as the letter saying it won't auto-renew came a month ago, they would only try and take payment on start date of new insurance.

TeachersPensionNovice

Sadly, they don't keep an audit trail regarding auto-renewal so they couldn't tell me how and when it got turned off. I think that is an omission. It's not much use if it can be silently turned off.

TeachersPensionNovice

"Fundamentally you've made an assumption despite them writing to you (irrespective of font size) and are paying the price for it. As you've found insurance has a variable price depending on the customers desperation to purchase and this is no different from many other goods/services."

Well, strictly speaking, they are paying the price as I found a better deal elsewhere. I'm not sure it's a good thing that we accept that companies exploit desperation. I must admit, during the grieving for my father, that the companies I had to deal with made me feel desperate. It was really quite unpleasant.

Aretnap

I looked into this a little while ago and the Financial Ombudsman's view is that an insurance company has a duty to take quite significant steps to ensure that a customer is aware that his policy is not going to auto-renew, especially if it has auto-renewed in the past, and had upheld complaints from people who received much more earning than the OP says he has received. See this post for details of some cases.

https://forums.moneysavingexpert.com/discussion/comment/78333332/#Comment_78333332

Those cases involved customers who had suffered quite serious consequences as a result of their insurance lapsing - accidents while uninsured or convictions for driving without insurance - rather than just more expensive renewal premiums. However I think the OP could make a reasonable arguement that the same principle should apply to him.

bluelad1927

I'm guessing this is a repost of 'RAC scammers' when clearly they weren't scamming anyone?

Sea_Shell

This happened to us a few years ago.  (well similar)

We had car insurance on Auto-Renew, and the letter said that payment would be taken on card ending XXXX, but we didn't realise that the card logged with them for payment had expired in the meantime*.    The payment then failed.    We had no further correspondence from them to advise, just a (late) letter in the post to tell us the policy had lapsed!! 

No phone call, no email or anything else. 

It didn't help that we were on holiday that week, so didn't know that the certificate hadn't arrived (we weren't paperless back then)

DH complained, and they agreed to stand by the renewal and backdate the policy to the original renewal date.

So the "warning" should be to double check that the card you have registered with them will be VALID at the time of your renewal, as the insurers DO NOT CHECK THIS, and still offer auto-renewal on an EXPIRED card.  

We don't use Auto-Renewal for car insurance any more.     


* ETA - OP, maybe that's why your AR got turned off, because they DID check and the card had expired?   Could that be the reason?

MorningcoffeeIV

TeachersPensionNovice said:

Well, strictly speaking, they are paying the price as I found a better deal elsewhere.

And that's what blows a massive hole through your conspiracy theory.

DullGreyGuy

HillStreetBlues said:

Wonka_2 said:

@TeachersPensionNovice before casting conspiracy theories you need to be clear how the auto-renew was 'turned off'. If it was a credit card issue it would be more likely to be a payment failure when they tried to charge the card and would be communicated accordingly.
ase and this is no different from many other goods/services.

It won't be anything to do with CC, as the letter saying it won't auto-renew came a month ago, they would only try and take payment on start date of new insurance.

It certainly can be to do with the CC.

Before taking a reoccurring payment under a CPA a merchant is required to run the card updater service which gives one of three responses - 1) proceed with existing card number, 2) proceed with this new card number or 3) dont proceed and a reason code.

When a former client introduced the card updater service they set it to run before the renewal letters were generated because the auto-renewal letter would state "if you dont do anything we will renew your policy and apply the charge to card ending 1234". As such they wanted to update the card number should the response from the service be a new card number.

Similarly if the response was option 3 then auto-renewal was stopped and the customer informed they need to contact us to accept the renewal as we had no billing details. 

Sea_Shell said:

This happened to us a few years ago.  (well similar)

We had car insurance on Auto-Renew, and the letter said that payment would be taken on card ending XXXX, but we didn't realise that the card logged with them for payment had expired in the meantime*.  

An expired card often isnt an issue for CPA, even if the card updater service isnt being used, or at least it isnt for a good number of years anyway. On the recurrent payments expiry date (nor CVV or 3d secure) isnt used and some banks dont change the card number on renewal and those that do often still associate the old number with your account for some time (AmEx it appears to be 5 years) so payments still go through even if you've reported a card as lost or stolen. 

Where it does become a problem is when accounts have been closed, subject to fraud or the CPA has been cancelled.

Aretnap

bluelad1927 said:

I'm guessing this is a repost of 'RAC scammers' when clearly they weren't scamming anyone?

Oh, the notion that it's part of a nefarious scheme to extort more money from the OP is obvious nonsense. C*ck-ups are far more common than conspiracies, and in any event insurance companies rather like auto-renewal as it encourages customers to renew unthinkingly rather than move - it's auto-renewal l, not the absence of auto-renewal, which enables them to boost premiums.

However the fact that it's not a scam doesn't mean that the insurance company have done everything right or that the OP has no grounds for complaint.

For the best chance of a successful complaint put your point firmly but politely, avoid emotive terms like "scam" or suggestions of vast conspiracies - stick to saying clearly and concisely what you think the insurance company has done wrong and what you would like them to do to put it right. Be realistic about the last point eg ask them to refund you the difference between your original renewal premium and whatever you ended up paying - don't demand a million pounds in compensation.