Car Insurance Company Invitation to Insurance Fraud
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PasturesNew
Posts: 70,698 Forumite
I wasn't sure what to use as a title.... but I've just renewed my car insurance and had a strange conversation, so I'd like people's opinions, advice, input on this situation where good, honest people can fall into a trap of insurance fraud simply by "not realising", or "nor being able to afford to continually be 100% legal".
Get your head into the mode of: The driver has no intent of committing an actual fraud, nobody's actually done much "different", nothing's really changed at all. No small animals or children are being harmed.
If I have a change of circumstances, there is a £25 fee to update my information with my insurance company. Sounds OK... but for some people that change of circumstances is simply "losing their job" and "getting another one". Most people, working or not, will expect to be doing "the same sort of job" 99% of the time.
If you lose your job you should phone them up as you're now unemployed - and pay £25 - and maybe an increased premium. If 2 weeks later you get a temporary job of, say, 2-3 weeks, you have to phone them up, pay £25 ... and when that finishes, phone them up, pay £25 .... ad infinitum.
And - you can't even technically "get away with it" if you have your car insured with you as "unemployed" and then take a job across the road where you walk to work and never use the car because you're then "employed".
So .... what would people do? I bet most don't pay these fees every time they change their jobs, or lose a job, or take a temporary job....
Car for social/domestic only ... fine... so you get a local job at the local shop and you walk there/back ... but you'd need to change your car insurance and pay.
I can understand that, for some people, changing jobs etc is a significant change of life/circumstances, but this nit-picking just seems to be at a ridiculous level, thereby inviting people to commit insurance fraud by simply not realising, or not wishing to pay £25 each time "for nothing".
Thoughts?
Get your head into the mode of: The driver has no intent of committing an actual fraud, nobody's actually done much "different", nothing's really changed at all. No small animals or children are being harmed.
If I have a change of circumstances, there is a £25 fee to update my information with my insurance company. Sounds OK... but for some people that change of circumstances is simply "losing their job" and "getting another one". Most people, working or not, will expect to be doing "the same sort of job" 99% of the time.
If you lose your job you should phone them up as you're now unemployed - and pay £25 - and maybe an increased premium. If 2 weeks later you get a temporary job of, say, 2-3 weeks, you have to phone them up, pay £25 ... and when that finishes, phone them up, pay £25 .... ad infinitum.
And - you can't even technically "get away with it" if you have your car insured with you as "unemployed" and then take a job across the road where you walk to work and never use the car because you're then "employed".
So .... what would people do? I bet most don't pay these fees every time they change their jobs, or lose a job, or take a temporary job....
Car for social/domestic only ... fine... so you get a local job at the local shop and you walk there/back ... but you'd need to change your car insurance and pay.
I can understand that, for some people, changing jobs etc is a significant change of life/circumstances, but this nit-picking just seems to be at a ridiculous level, thereby inviting people to commit insurance fraud by simply not realising, or not wishing to pay £25 each time "for nothing".
Thoughts?
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Comments
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Have you actually checked that the £25 fee is applied when informing the insurer of a change of job? While a change of premium may be incurred (up or down) I'm not sure that simply telling them you've changed job will necessarily attract the fee.0
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Have you actually checked that the £25 fee is applied when informing the insurer of a change of job? While a change of premium may be incurred (up or down) I'm not sure that simply telling them you've changed job will necessarily attract the fee.
One can't discuss every potential situation "in case" it occurs.... but my insurance is currently set to "not working" and I said I might get a job so wanted a quote for being able to commute, in case it was cheaper than the £25 fee.
She quoted me £38 more for "commuting", but then pointed out that I'd incur the £25 fee in any case as I'd be changing from "not working" to a job. I then asked "what if I have social/domestic use only and get a job that I walk to" and she said "but you'd be working, so that'd be a change even though you'd not use the car for work".
She definitely implied that any change of circumstances, whether it affected how I use the car or not, would incur a fee.
(For the record, conversation was with a well known insurance company for older people four letters beginning with S).0 -
PasturesNew wrote: »I can understand that, for some people, changing jobs etc is a significant change of life/circumstances, but this nit-picking just seems to be at a ridiculous level, thereby inviting people to commit insurance fraud by simply not realising, or not wishing to pay £25 each time "for nothing".
I don't understand where the invitation is.
The policy is rated based on your circumstances at the time. You have to inform them of any changes and some (most) companies charge a fee for a change. £25 is ok for a fee - some don't charge a fee if you do it on line.0 -
PasturesNew wrote: »One can't discuss every potential situation "in case" it occurs.... but my insurance is currently set to "not working" and I said I might get a job so wanted a quote for being able to commute, in case it was cheaper than the £25 fee.
She quoted me £38 more for "commuting", but then pointed out that I'd incur the £25 fee in any case as I'd be changing from "not working" to a job. I then asked "what if I have social/domestic use only and get a job that I walk to" and she said "but you'd be working, so that'd be a change even though you'd not use the car for work".
She definitely implied that any change of circumstances, whether it affected how I use the car or not, would incur a fee.
(For the record, conversation was with a well known insurance company for older people four letters beginning with S).
Therein lies your problem, this Broker is the most money grabbing of them all and preys on their demographic.
I used to work for an insurer on their Home panel, some of the cases I saw where the commission outstripped the net price (the amount the insurer gets) by a disgusting margin. Standard commission in the Broker Home market is circa 30% for mainstream risks, I saw cases with over 90% commission. When we challenged them on this, they refused to be drawn into a discussion on it.
rs65 is correct, any changes to the information provided need to be disclosed. If you don't want to pay an admin fee for this, go to an insurer who doesn't charge fees.0 -
They were the cheapest this year - and I was changing back to them as I'd swapped last year. I blame Martin/MSE for making us all "worry" about checking/changingpaddyandstumpy wrote: »Therein lies your problem, this Broker is the most money grabbing of them all
For me the sums aren't huge to be honest.... fully comp is sub £250.paddyandstumpy wrote: »...If you don't want to pay an admin fee for this, go to an insurer who doesn't charge fees.
I guess I'd just never thought about it before/heard of it before and/or it wasn't relevant or wouldn't even have occurred to me.
e.g. about 6 years ago I was "moving about a bit, trying to rent/be settled" and I had about 8 addresses, from a week in a holiday let to a hotel to a one month rental to a house share and then to a rented flat. As somebody who has never had an accident or claim in nearly 40 years of driving, while I can appreciate that they need to be kept up to date with your address ... it never occurred to me once about car insurance or changing address etc.
As I didn't know there were charges to change, I'd have not looked for one that didn't have charges. Some things in life you simply don't know about because it's never been on the radar.
Also, would I have "bothered" to keep them abreast of all address changes including hotels and caravans etc... and risk a trail of marketing material dropping through letterboxes for years after I've vacated? (which is my main reason for not changing addresses with companies as you get a raft of marketing materials for years after you've left anywhere).
I bet most people don't even think about insurance/address to this level of detail while they are going through changing circumstances that aren't "wildly different and concerning".0 -
The rise of the internet comparison sites has largely driven this race to the bottom on price.
To stay in competition; insurers sell at a loss to then try and recoup premium in the following years by retaining the risk at a higher price, but the client simply moves for a "new customer price" elsewhere.
They will also work on an explicit cost based model where those who cost the most in admin (i.e. those who make changes) pay explicitly for the work they create via admin fees, this allows the costs to be allocated away from the NB and keeps the price down.
This is without factoring in the "acquisition fee" payable to the comparison site in the first year, this can be as much as £75 per case, regardless of whether the premium is £150 or £1,500.
Insurers traditionally haven't made money in underwriting Motor business, they rely on other ways of making money like investment returns and sale of add ons.
Fee's aren't new, but one thing to bear in mind if you're likely to make changes.0 -
You do agree that you have read and understood your policy ts and cs when you first buy the policy.PasturesNew wrote: »Also, would I have "bothered" to keep them abreast of all address changes including hotels and caravans etc... and risk a trail of marketing material dropping through letterboxes for years after I've vacated? (which is my main reason for not changing addresses with companies as you get a raft of marketing materials for years after you've left anywhere).
I bet most people don't even think about insurance/address to this level of detail while they are going through changing circumstances that aren't "wildly different and concerning".
That will include all the things you are now (sorry!) moaning about
Fail to inform changes gives the insurer the opportunity to void the policy!
Bad news, but even worse news if they do this when checking you out at the time of a claim which they could be allowed to reject. (If a claim was made against you then although they would deal with the third party they could then turn their sights on you to reimburse them)0 -
We all agree to read all T&Cs thoroughly before we sign ... but do we really ... and do we really understand it all .... or do we just assume "there'll be nothing odd in there as it's a proper/big company" and just figure that everything's "normal", without realising that our idea of normal isn't how small print sets it out. Also "change to a policy" isn't how I'd view changing address, say, or changing a job that's essentially the same type of job in the same area.You do agree that you have read and understood your policy ts and cs when you first buy the policy.
That will include all the things you are now (sorry!) moaning about
Fail to inform changes gives the insurer the opportunity to void the policy!
Bad news, but even worse news if they do this when checking you out at the time of a claim which they could be allowed to reject. (If a claim was made against you then although they would deal with the third party they could then turn their sights on you to reimburse them)
As I said in my original post, it's not that people set out to commit a fraud, or even know they did that .... just saying that it can be easy to "slide into one" blindly, because what one sees as a "change" differs to an individual company's definition of a change.0 -
I choose to be with a broker/insurer which doesn't charge for monthly instalments and doesn't charge for mid-year alterations.
Overall, I appreciate I pay more as a result.
If you wish to gain on the swings; you can't complain about the explicit costs of the roundabouts.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »I choose to be with a broker/insurer which doesn't charge for monthly instalments and doesn't charge for mid-year alterations.
Overall, I appreciate I pay more as a result.
If you wish to gain on the swings; you can't complain about the explicit costs of the roundabouts.
Until today ... and this thread .... I didn't know there were such charges though. I've been driving 40 years and never made a change, or even thought about it to be honest... except address changes, which were very few in past years.
So, I've "suddenly discovered" this concept of changes and charges.0
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