Churchill Car Auto Renewal Price Hike - Successfully Negotiated Massive Reduction

Willing2Learn

My auto renew car insurance quote (comprehensive plus) was £1200 more than the previous year.

From just over £3000 last year to just under £4200 for the year beginning April 20th
That's a whopping 40% increase (approx).
And I had no claims for over 2 years and no convictions for over 3.

I then got a quote from a price comparison site for the exact same Churchill policy that was only £2800

I phoned to say that the increased premium via auto renewal was unacceptable and that I would go elsewhere.

The response was that premiums are going up across the board.

I then told them about price comparison quote being so much lower, and that they are effectively ripping off existing customers by not automatically offering the lowest price.  I said I wanted to officially complain about this after at the end of this call and would be seeking reimbursement for having to call them.  (I phoned from Egypt at a cost of £75 as my insurance expires while I'm away for a few weeks).

Anyhow, this took 1 HR 18 minutes on the phone to resolve.

My premium for the next year was adjusted down to around £2750 (from just under £4200).
A massive drop.
And via my complaint,  I plan to get my £75 call charges back and hopefully something extra as a goodwill gesture too.

Bottom line.... Don't let yourself get ripped off!!!

And please use the complaints system, so that we can try and get this awful business practice put into the trash.

Although this post relates to Churchill, this auto-renewal ripoff is a practice replicated my many others in the industry.  Churchill are a good company and no different from any other provider.

DullGreyGuy

Insurers legally can charge you no more for your Home and Car policies than they would a new customer buying the identical product via the identical channel. Obviously what that does mean is that insurers are allowed to differentiate by channel. 

Given you are a phoner then its likely your last policy was considered bought by phone, as this year will be, and so when it renews it can be more expensive than their aggregator price but not their phone price. 

Why you paying £75 for a phone call? Get yourself a free VOIP account and then you can call the UK from anywhere in the world where you have an internet connection for the same price as if you'd been in the UK which for an insurer they'll normally have at least one 0800 number and so would be free. 

Willing2Learn

DullGreyGuy said:

Insurers legally can charge you no more for your Home and Car policies than they would a new customer buying the identical product via the identical channel. Obviously what that does mean is that insurers are allowed to differentiate by channel. 

Given you are a phoner then its likely your last policy was considered bought by phone, as this year will be, and so when it renews it can be more expensive than their aggregator price but not their phone price. 

I'm not suggesting that what they did was unlawful.

I am saying it is dishonourable and a total ripoff to set an auto-renewal that is 50% higher than the price I eventually got.  It is a disgraceful practice that effectively robs consumers of their hard-earned money.

It should not matter how I renew.
By phone.
By computer.
By auto renewal.
By price comparison website.
Every customer should always get the the true price ... The best price.... The lowest price 

It took me 78 minutes on the phone to get the right price (IE the best price they can do for the service provided).
The call centre agent was excellent, and had to contact the underwriters as the Churchill computers would not honour the price comparison Churchill quote for the same product.

DullGreyGuy

Willing2Learn said:

DullGreyGuy said:

Insurers legally can charge you no more for your Home and Car policies than they would a new customer buying the identical product via the identical channel. Obviously what that does mean is that insurers are allowed to differentiate by channel. 

Given you are a phoner then its likely your last policy was considered bought by phone, as this year will be, and so when it renews it can be more expensive than their aggregator price but not their phone price. 

I'm not suggesting that what they did was unlawful.

I am saying it is dishonourable and a total ripoff to set an auto-renewal that is 50% higher than the price I eventually got.  It is a disgraceful practice that effectively robs consumers of their hard-earned money.

It should not matter how I renew.
By phone.
By computer.
By auto renewal.
By price comparison website.
Every customer should always get the the true price ... The best price.... The lowest price 

It took me 78 minutes on the phone to get the right price (IE the best price they can do for the service provided).
The call centre agent was excellent, and had to contact the underwriters as the Churchill computers would not honour the price comparison Churchill quote for the same product.

The regulations say it can matter how you buy/renew... many insurers simply gave online customers a flat 10% discount over the telephone buyers pre the rule changes but others have different pricing depending on method. Having done a bit of work in this space in the past the types of customers that phone up Churchill and buy display different behaviours than people who go onto confused.com and then buy from Churchill beyond just their preferred communication method (which in itself has a cost implication). 

"Churchill" these days is just a trading style of UK Insurance who are the underwriters of all the trading styles that sit within Direct Line Group. Assuming they use the same model as they used to if something won't price or is exotic or a big discount is wanted to be given your standard call centre operator speaks to the referral team who have more authority to change/set prices and clear warnings. The operator can then go back into the quote and complete the sale. There are others in the company who actually have the job title of underwriter but they have little to do with the day to day operations other than the most exceptional case being brought to them.

It's different when you are talking about a broker or another form of intermediary where the sales person and the underwriters work for different companies. 

Willing2Learn

@DullGreyGuy - You are totally missing the point here....
I am not talking about the law, or the regulatory framework.
Nor am I suggesting that any policies have been broken.

I am saying that to set an auto renewal price at a level that is nearly 50% more than the price they would give me if I were to use the phone or a price comparison site, is immoral at best and could be considered dishonest at worst.
It is morally bankrupt....

It means that there will be countless people paying much more in premiums as a direct result of an auto-renewal system that does not automatically give existing customers the best price.  Customers who are therefore being ripped off.  A 50% mark-up in price for an auto-renewal is an absolute disgrace.

This thread is a heads-up to people, so that everyone knows to check price comparison websites and verify their insurance provider is offering an auto renewal at the best possible price.
And to phone when there is a difference.
And to complain if the insurance provider is acting immorally.

If I had left it to the Churchill auto renewal system, I would have paid 50% extra (£1,200 extra) which is simply wrong.
And outrageous.
Not unlawful.
Not in breach of any regulations.
Not against policy.
But plain wrong.
And a terrible way to treat a customer.
And definitely an abuse of the auto-renewal system.

Their is no excuse for this type of behaviour, other than corporate greed.

DullGreyGuy

Continuing the same assumptions...

Its not that its a renewal, its that you are a telephone customer... had you called for a quote you would have gotten the same 50% higher quote that you received for your renewal. Were you an aggregator customer then your renewal quote would have been what you saw on the price comparison site. 

This does assume that the products haven't changed, it can also be that you are on an older set of terms and they are offering a lower set of terms to new customers via aggregators (its not uncommon for aggregators to have lower quality products). If people dont have the same product then that too allows them to differentiate pricing. 

For example a former client decided to remove Driving Other Cars from anyone buying via aggregators. Anyone getting new prices would now see a lower price because they're getting a lower product. If they decided to let renewing customers keep DOC then they rightfully should pay more for having more cover. Phone customers continued to get DOC cover so paid a higher price

Willing2Learn

The point of this thread, is that insurance providers should automatically set the price of an auto-renewal at the lowest possible price for a continuation of the exact same product.  To do otherwise is immoral and rips off the customer.

@DullGreyGuy - Please stop repeating your info about how the system works in relation to how a customer CONTACTS an insurance provider to buy a policy.

This thread is about an auto-renewal of a motor insurance policy when there have been no claims or convictions during the previous policy term (as stated in my original post).
The fact that it is an auto-renewal would also indicate that both the designated vehicle and driver are the same as the previous year.
With an auto-renewal there is NO CUSTOMER CONTACT.

There are no changes from the previous year.

The product being sold is identical.
Therefore the policy auto-renewal (ie A renewal without any input from the customer) should automatically be at the lowest possible price.

All the info you keep providing (and repeating) are derailing the thread and changing the subject.  Please don't do that.  Thanks

DullGreyGuy

Then take it up with the FCA who agree that there is a difference depending on how a customer buys their insurance and thus decided to set the rules that pricing can be differentiated by channel both at new business and renewal. 

As well as a difference in operational costs there is a correlation in claims with the channel of purchase.

dunstonh

It should not matter how I renew.

Good job you are not a businessperson.   You wouldn't be in business long if you cannot identify the different costs of different distribution channels and charge accordingly.

@DullGreyGuy - Please stop repeating your info about how the system works in relation to how a customer CONTACTS an insurance provider to buy a policy.

It is pertinent and relevant whether you like it or not.

The product being sold is identical.
Therefore the policy auto-renewal (ie A renewal without any input from the customer) should automatically be at the lowest possible price.

Actually, they are not always identical. Sometimes, there are different versions for different distribution channels.
And the amount that is paid to the aggregator or distribution firm will vary.   So, not identical and would not be correct to set renewals to the same price.

Willing2Learn

Good grief.   This is ridiculous.

My policy is renewing.

There are zero changes to the product I am paying for (other than it being another 365 day policy).
Same car.
Same driver (me).
No additional driver (same as year before).
Same voluntary excess.
Car still parked in secure gated car park for my block.
I live at the same address.
No modifications.
No motoring SP30 convictions since 2020.
No other motoring convictions.
No non motor-related convictions.
No claims since 2021.
Exact same level of cover.
Still never been refused insurance.
Exact same product.

I AM TALKING ABOUT AUTO RENEWAL OF IDENTICAL PRODUCTS.
EVERYTHING IDENTICAL TO THE PREVIOUS YEAR.

Simple.

Why are you guys insisting on NOT talking about an auto-renewal of IDENTICAL insurance products, when that is NOT what the thread is about?

You are talking about a non automated renewal of a policy (and cover) that may or may not be identical 

When an auto-renewal policy premium is calculated and offered to the customer, it is on the basis that there are no changes from the cover provided in the previous year.  Otherwise it could not and would not be automated.....

I say it again:
The product being sold is IDENTICAL.

Therefore the policy auto-renewal (ie A renewal without any input from the customer) should automatically be at the lowest possible price.
and
With an auto-renewal there is NO CUSTOMER CONTACT.

@dunstonh - Your message to me: "Good job you are not a businessperson. You wouldn't be in business long if you cannot identify the different costs of different distribution channels and charge accordingly..." I consider this to be a touch condescending and offensive. Implying that I am not able to identify the basic economics of how a business operates.  In addition to having a very good understanding of economics and finance, I am also able to assess poor corporate morality and business practices that disregard the needs of the consumer (and customer).
FWIW, I am very successful at what I do....

DullGreyGuy

Guess you think a 18 year old renewing should be charged the same as a 45 year old?

Thinking you dont realise the big raise in claims costs in the last year nor understand that UK Insurance, the company behind Churchill made massive underwriting losses last year and performed well worse than the market average 

At the end of the day, feel as indignant as you want. The reality is how people buy insurance is significant hence why insurers are allowed to rate on it like they can rate on the age of the driver etc.