What has happened to cheap car insurance?

DullGreyGuy

TSx said:

I've now been with the same (home) insurer for 4 years now - saw premiums rise one of those four but the rest saw a reduction. There is now a significant gap between the renewal price and the new customer price (from the same insurer), in my favour.

I'm presuming the legislation doesn't stop loyalty discounts and I imagine that my home insurer see me with 4 years of no claims being a better risk to take on than an unknown new customer who they'll have to pay acquisition costs for...

the law says for the same product via the same original channel that renewal customers cannot be charged more than new business. It has to consider direct cash like incentives too (eg free £50 amazon voucher) but not non-cash incentives (free cuddly toy).

Nothing to stop new customers being charged more than renewing but it would be unorthodox. 

One of the challenges is "the same product"... its more granular than simply "Home" or "Motor" but having not dealt with consumer insurance int he last few years I don't know the level of change required for it to be considered a different product. Its a ball ache to maintain different versions of policies and so insurers typically minimise it where possible but there were concerns that the rules could be bypassed by insurers offering renewing customers terms on the same product they currently hold and create a new product each year so new customers can be priced cheaper. Not sure if there is any evidence of this materially materialising. In your case the reverse may be true, you could be on an older lesser product and the new version has some extra bells and whistles hence the price difference  

joesoap1264

DullGreyGuy said:

joesoap1264 said:

What,s happened to the comparison sites ?
Something gone amiss !
Is it since law changed offering new customers discounts, and sod loyalty ?

Nothing, they do what they always have, present your data to each of the insurers/brokers on their panel and then show you the quotes they received back. 

It has always been up to the insurer if they want to created an ultra budget version of their product they can sell a bit cheaper to put on the aggregators and then keep the higher quality product for those getting direct quotes etc. 

Your last question seems an inverted way to describe the law change... it outlawed new customer discounts and penalties for loyalty. We are now 12 months on from the law change (for Home and Motor) and so insurers have developed their position now they've seen what competitors have done and the terrible underwriting results the two classes of insurance have had.

When I renewed it on the phone, I thought something wasn’t right, too cheap !!
A few days later, my renewal dropped through the letterbox, £406🤬
I rang again, and they were waiting!
the excuse was the letter quote was wrong, too high, so the guy on the phone gave me the right price!
now how’s that for an excuse.
probably the guy who renewed it has had a right old telling off, or the computer was wrong.?
however, they honoured their price !
surprised, as The money had not left the bank, it ain’t due till 29th Jan !
Co -op . Well done, at £406 it was £60 cheaper than all the comparison sites anyway, so I would have stayed with them .

Just_A_Dad

I totally don't trust insurance companies and I will tell you why.

Just been through it again as its now just under 4 weeks until the renew.

Last years policy was £36/pm

Monday
Went onto current insurers website - wasn't able to get a renew quote as 29 days away.
So (bearing in mind) logged in and with all driver details stored - got a new quote to start the day after the current policy expires.
The policy quote, same lender was £38/pm.
I did a comparison site quote as well to check - and this came back with about 100 quotes - but about 7-8 lenders with the same £38/pm(some with higher excess)
So I thought ok, wait for my renew to come through

Tuesday
bang on 28 days - get a renew email through - go through to website - £57/pm (the exact same quote I got the day before from the same company)

Ask me do I want it- NO

I recall the saved quote that was £38/pm - go to buy it - wants to take £55/pm - no idea why its this amount - Asks me do I want it - NO

So I check the comparison sites again - all companies say £38...

Hmm what to do.

MY policy is set to auto renew - so go and cancel it online - it says why, so I click renew is not competative.
was expecting it to say 'ring this number'
but it gave me a drop down box - I picked the name of one of the other companies from the comparison website and placed the £38/pm figure into the box, clicked enter.

... my existing company automated comesback, we can do £36.99/pm do you want to go ahead...


.. Absolutely YES

So thats it - another years insurance - for only £0.99/per month extra (3%)  - when it was set to be 52% more expensive (£19/per month)

Its an absolutely broken system....