Stupid People Budget - Car Insurance

shelly

Albert_FTB wrote: »

Peterae has come on this forum for advice and support as he feels, and quite rightly in my opinion, that a big company has taken liberties with one of its customers.

I do not understand the need for people who obviously have nothing better to do than devour reams of terms and conditions (and feel very smug with themselves that they have actually done so) be so high and mighty about it.

Being condescending towards those who get taken advantage of by big business isn't really the point of this site is it people?

Personally I didn't find out this info from reading reams of terms and conditions, it usually says on the renewal notice something along the lines of "If you wish to renew this policy you don't need to do anything we will do it, if you wish not to renew please call us" and had you read peteraes post #5 you would see that he too found the info on the renewal notice that he didn't bother reading. IMO he hasn't been taken advantage of, the info was there had he bothered to read it.

Albert_FTB

“As for reading reams of terms and conditions, as a first time buyer perhaps you ought to start doing this. All motor policies these days are written in plain english with clear explanations of charges, cancellation terms, what is covered and what is not. If you cannot be bothered to read a 20 page A5 policy booklet you really have no-one to blame but yourself really.”

There was nothing in my post suggesting I didn't read terms and conditions, which by the way was written in plain English. I'll try and make this post simpler.

“The point of the site isnt to be anti business. If people are too lazy to read letters sent to them on something important like their car insurance renewal then they only have themselves to blame.”

I didn't say the point of the site was to be anti-business. My point was that people being condescending towards others wasn't really in keeping with the spirit of the site.

“The minority cancelling have to pay the premium rate but thats better than the majority renewing not having to pay it.”

If your point is it's better to cater to the majority then you must agree that automatic renewal should not be used, since the majority of people switch companies each year (as it's generally cheaper). Right?

The underlying point is that insurance companies, no matter how much we would like to believe so, do not employ the auto-renewal method for the benefit of its customers. It's simply a very sneaky tactic to swell the coffers. For example, I recently received the standard renewal letter for home insurance which came through the post. Glancing down (I know, I should be shot!) the first page it looked like the standard notification that my policy was about to expire, please call us to renew, etc. However on the second page was a sentence explaining that the policy was to be automatically renewed anyway. Bearing in mind that auto-renewal is a relatively new concept to my knowledge, many people would have looked at the first page of the letter and, if having already arranged cover with a different company, would have decided that, "it's only the letter reminding me I need to renew, but I have gone with a different company so I do not need to do anything", and thrown it in the bin (better shred it though because you don't want to be patronised about that as well). Companies are aware of this type of situation and will make money as a result. Moreover, as far as I am aware if a renewal letter which has auto-renewal on it goes missing in the post, then the customer cannot use that as an excuse for not being aware of the fact, i.e. they will still be stung for cancellation charges. If the insurance companies truly care about us and don't want us to get in trouble because we have (god forbid) let our insurance lapse, why don't they send their correspondence by recorded delivery so that they can identify when people have not been notified? Or what about this for an idea, why don't all companies ask if the customer would like to auto-renew when the customer calls to buy a policy in the first place?!?! Sounds good to me.

This is not really about who scores most in the 'Reading and Understanding T+Cs, & Being Clever With It' quiz. In many ways what is in the T+Cs is irrelevant. Why not put the onus on the individual to renew, not on them to cancel an auto renewed policy? And if they don't renew then fine, catch them, charge them, convict them and when they're on their last legs and can take no more, get them to post on this site so that all the clever people can say, "well, you're an idiot because...."

mattymoo

Albert_FTB wrote: »

If your point is it's better to cater to the majority then you must agree that automatic renewal should not be used, since the majority of people switch companies each year (as it's generally cheaper). Right?

Your whole argument is based on this premise which is wrong.
The majority do not switch, most renew. Insurers call this the "lapse rate", ie. the percentage of current policies that will not be renewed, presumably because the customer has found a better deal elsewhere.

They start to get really worried when the lapse rate goes above 15%.

So you see, insurers are catering for the 85%, while Martin caters for the 15% who know they can get a better deal by moving.

raskazz

Albert_FTB wrote: »

Being condescending towards those who get taken advantage of by big business isn't really the point of this site is it people?

Well the whole purpose of the site is to empower cosumers. The easiest action that you can take to empower yourself is to take responsibility to read things that you sign up to, rather than expecting to be mothered. Not rocket science is it.

Primrose

I think the way to avoid this kind of problem is to be more organised personally. I put a note in my computer diary a month before all insurance policies are due for renewal and start checking out what alternative quotes might be. This ensures that when the insurance renewal notices drop through the letter box (normally showing a nasty surprise increase), we are not caught unawares and have time to either move to another company or challenge the existing insurer to reduce the cost. It also pays to check the Terms and Conditions and often these days, such automatic renewals are becoming increasingly the norm, and as far as cover is concerned, I'd rather pay an extra month's premium than find I'm involved in a car crash, or have a major fire in the house and find that I'm uninsured.

dunstonh

This is not really about who scores most in the 'Reading and Understanding T+Cs, & Being Clever With It' quiz. In many ways what is in the T+Cs is irrelevant. Why not put the onus on the individual to renew, not on them to cancel an auto renewed policy? And if they don't renew then fine, catch them, charge them, convict them and when they're on their last legs and can take no more, get them to post on this site so that all the clever people can say, "well, you're an idiot because...."

Its not the T&C reading that really matters here. Its the side or two of A4 in the renewal letter with the section called "what to next" that matters. If you cannot be bothered to read that then you are stupid.

If your point is it's better to cater to the majority then you must agree that automatic renewal should not be used, since the majority of people switch companies each year (as it's generally cheaper). Right?

As mattymoo and I have already said, the majority renew. You are making incorrect assumptions.

The OP wanted to slag off a insurance company in a public arena but had his facts wrong. It was their own error not the insurance company so therefore its only right that the posters here correct that. If the insurance company had been in the wrong then you can bet your life all of us would be supportive and letting them know what to do.

It serves no purpose to be sympathetic and supportive to someone that is in the wrong. It will give them the wrong impression. It also isnt fair on companies to get a bad reputation when they have not deserved it.

nomeansno_2

As previous posters have said, I don't think there is anything new about automatic renewal. This is generally seen as mutually beneficial to both the policy holder and the insurer. Lazy and/or forgetful policy holders are ensured continuity of cover, and the insurer benefits from and exploits customer inertia, gaining default business with uncompetitive renewal premiums.
However, what seems to be different in the case of Budget, is the vigour with which they attempt to milk their side of the benefit.
In my case, I thought I had cancelled renewal by cancelling the direct debit to budget. I still believe this should be sufficient indication of my wish to terminate the contract - "no" means "no" however it is said. This has certainly been the case with other insurers that I have contracted with in the past. Budget's response however was to renew the policy, immediately cancel it and then demand £90.00 or so in cancellation fees.
This represents either a significantly more robust interpretation of the contract than that adopted by other insurers, and expected by policy holders, or a subtle rewording of the small print.
Many posters have argued that anyone falling foul of the small print deserve all they get. I disagree. Policy holders are not lawyers, and should not be expected to be. Anyway, no matter how clearly worded the contract, the fact is that people often don't read the small print, so any attempt to exploit this by varying the contract from the expected norm is just plain sneaky, and should be punished by withdrawal of business.

raskazz

nomeansno wrote: »

In my case, I thought I had cancelled renewal by cancelling the direct debit to budget. I still believe this should be sufficient indication of my wish to terminate the contract - "no" means "no" however it is said.

But cancelling the Direct Debit payment is not 'saying no'. When a mandate is cancelled without explanation then the insurer cannot differentiate between those who have cancelled the direct debit to seek cover elsewhere or those other situations where the insured actually requires the cover to continue, but for whatever reason has had problems with their bank or with making the payment. It's pretty fundamental that the cancellation of a payment is not equivalent to cancellation of a contract.

nomeansno wrote: »

This has certainly been the case with other insurers that I have contracted with in the past

I don't know of any motor insurer that automatically deems that the policy is cancelled simply because the Direct Debit mandate has been cancelled.

nomeansno wrote: »

Budget's response however was to renew the policy, immediately cancel it and then demand £90.00 or so in cancellation fees.
This represents either a significantly more robust interpretation of the contract than that adopted by other insurers, and expected by policy holders, or a subtle rewording of the small print.
Many posters have argued that anyone falling foul of the small print deserve all they get. I disagree. Policy holders are not lawyers, and should not be expected to be. Anyway, no matter how clearly worded the contract, the fact is that people often don't read the small print, so any attempt to exploit this by varying the contract from the expected norm is just plain sneaky, and should be punished by withdrawal of business.

I disagree that the situation is related to 'small print'. It seems to be something of a cliche because every inertia renewal notice I have ever seen (and I have seen quite a few) makes it very clear what the renewal procedure is. Budget's approach to this seems to be entirely consistent with the market, apart from the level of the cancellation charge which does seem relatively high.

nomeansno_2

A "no" communicated via DD cancellation has always meant "no" in my previous dealings with other insurance companies.
My cover did not continue beyond the point that payment was refused - policy termination and demand for a cancellation fee immediately followed renewal. So Budget clearly did differentiate.

It may or may not be true that this doesn't really relate to small print. It may simply be that Budget sought to extend their contractual benefits beyond the accepted norm and try to make some additional money out of a lost customer.

dunstonh

Cancellation of the direct debit is not the same as cancelling the contract. All it is doing it cancelling that payment method.

For some contracts, non payment will result in a cancelled policy after a period of chasing. However, car insurance is different to that.