Stupid People Budget - Car Insurance

raskazz

nomeansno wrote: »

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.

Seeing as around 75% of policyholders do renew, I think that to assume that they are all lazy or forgetful is a little off. Perhaps a substantial portion of them actually know that value is a combination of price and quality, and don't simply equate 'cheapest' with 'best'.

nomeansno_2

raskazz wrote: »

Did they 'immediately' cancel the policy? Are you saying that no other correspondence was sent other than the renewal notice? No letters at all in respect of the DD cancellation? I find that hard to believe, personally.

I am pretty sure that cover was immediately withdrawn the moment that payment was declined. This is the only reasonable action that an insurer would take if no premium had been paid. Actually I did not personally receive any letters on the subject, since I was abroad for the entire period in question. However, I'm pretty sure that there would have been some correspondence. In particular, as I said, I would expect that Budget offered to allow me to reinstate my cover in exchange for a premium. As I also said, this offer would have been of no interest to me or someone in financial distress.

nomeansno_2

raskazz wrote: »

They do have the other course of action - that of taking responsibility to read their renewal notice and policy documentation and taking the appropriate action - i.e. calling or writing to the insurer to decline the renewal.

It is indeed true that this option was on offer prior to the renewal date. I was trying to say that it was not an option once the renewal/termination/cancellation fee moment had passed.

nomeansno_2

raskazz wrote: »

Seeing as around 75% of policyholders do renew, I think that to assume that they are all lazy or forgetful is a little off. Perhaps a substantial portion of them actually know that value is a combination of price and quality, and don't simply equate 'cheapest' with 'best'.

I did not intend to suggest that lazyness and forgetfulness are the only valid reasons for continuing with the same insurer. I was trying to say that I think automatic renewal can be a valuable benefit to people who are lazy and/or forgetful.