Home Insurance - automatic renewals!!

Woodman

Hi,

Quick information to all those money savers out there. Apologies if it's already been covered elsewhere before.

I received a renewal notice from a major insurer - surprising since 11 months previously I had used a comparison site to get a much better quote. On checking my last renewal, I realised that my DD had simply carried on with the old insurer because I had done nothing! I quickly cancelled the DD, hoping to limit my losses.

The good news is that you cannot be dual insured and therefore both companies you are insured with should refund 50% of the premiums paid. In my case, the old insurer stumped up the lot and repaid me very promptly.

However, I'd like to know what the general view is out there. I think the FSA should stamp on automatic (do nothing) renewal. It happened to me, but there are many disadvangtaged sections of society who may not realise what is happening to them and remember, it will renew even if you don't get the letters. Also, I did not get any new policy documents after the renewal to alert me to my continuing contract!

If no one has checked with the FSA, I'm happy to get their view, although my previous insurer assured me that the FSA was happy with automatic renewal because it kept people insured when they might (by mistake) let their insurance lapse.

The speed of response from the insurer and the prompt refund makes me think they don't want too many questions asked.

Yours in Saving,

Woodman:beer:

raskazz

The FSA are aware of and have absolutely no problem with automatic renewal.

It's easy to say there are 'disadvantaged sections of sociey' but then again if they cannot handle their financial affairs, in the absence of automatic renewal you would experience the other edge of the sword and have a lot of people complaining that their policy lapsed and they then found out they were not covered, which is a lot worse IMHO. And if you do not want to be part of automatic renewals, the nature of renewal is stated and you are always given the option to withdraw from the automatic process, or even cancel the policy under your cooling-off rights.

It is absolutely the best practice in motor insurance, where it does help reduce uninsured driving.

I'm sure your insurer sent the renewal notice but as everybody is aware the Royal Mail are not exactly the most reliable of services. This is why you have to take responsibility for your own affairs, because the method of renewal is stated in the contract and subsequent renewal notices.

lisyloo

Hi Woodman,

Non-disadvantaged people need to read their contracts and familiarise themselves with what they are signing up to.
We don't live in a perfect world so it's important to make sure things are put in writing, send letters recorded delivery, keep copies, make notes and check bank statements.

Disadvantages people should get advice and help.
They can authorise a family member to help them (and there are mechanisms like power of attorney) or if they have no family, friends, relatives or colleagues at all then they can contact a broker. If they get professional advice then there will be some come back if anything goes wrong.

The insurance industry is a private sector which is run for profit and whilst I wouldn't claim that everything perfect (or anywhere near), I think that people who are expecting the service to be run in a moral, fair and "hippy commune" kind of way need to acquaint themselves with the way a capitalist society works.
I'm not asying I'm a great fan of the system (I'm not) but I understand that I need to work with it OR set up my own company.
Whinging that the system isn't to my liking is not something I would consider constructive.

I totally agree with your cynicism on a number of issues.
In reality it's very few items that Royal Mail actually loose.
But it's quite amazing the number of cancellation letters that don't arrive.
I'm quite cynical about the way a number of companies make it very easy to sign up and almost never have a problem processing payment, but when you want to cancel you can't get through on the phone or your letter gets lost.
Royal Mail is mostly a red herring but to ensure against it then I advise people to send important letters by recorded delivery. It enables you to prove the letter was received, but IMO you are protecting your self against cynical companies and not Royal Mail.
In other cases (like returning a rental CD) it may be more appropriate to get a free proof of posting. It doesn't prove receipt but it proves you posted it which in some cases is sufficient.

Woodman

Thanks for comments.

I think I was trying to alert readers to the facility for recouping premiums when doubly insured rather than making any wider comment, although I did raise a few first thoughts. I was surprised to make the mistake myself when I have been a keen MSE supporter for some years, and thus probably more aware than some of what can happen.

Believe me, I don't trust any financial institution having had a number of run-in's over the years. I persisted with Standing Orders rather than DD's until none of them would accept them. I paid by cheque until the discounts were only available for going to a DD. I won proving a mis-sold endowment from 1987.

If I only alert a few to the double insurance issue then I've done my bit.

And of course, how do you reach the largest number - by MSE of course.

Happy saving all,

Woodman