Tuesday, May 12, 2020

The great insurance rip-off

I'm sure I've moaned about this somewhere, sometime previously, but insurance renewal of any description is an absolute minefield, and unless you're a savvy customer, a complete rip off.

Whether it's car, house, travel or any other form of insurance, having shopped around for the best price, when it comes time to renew your policy, existing customers are invariably whacked with increases (sometimes significant in their premium).

Insurance renewal - a minefield
My wife has received her car insurance renewal documents this week. Let's put some context in place. She's over 50 (hope I get away with that one), drives an unmodified, 2017 1.0 litre  Ford Fiesta, drives around 5k miles a year and has maximum (protected) no claims bonus, and thankfully no accidents in at least the last 5 years. An experienced and safe driver of many, many years. There's one other named driver on the policy (me), now north of 60 and driving since 1977 also with no claims.  All in all, you'd expect pretty low risk.

Her renewal quote is just over £400 - and that's with two additional discounts applied, the first because of her membership with a particular organisation and the second because I hold another LV insurance policy. It's a £30 hike on last year's premium (which in hindsight was also pretty steep).

Her current insurer (and let's name and shame here) Liverpool Victoria (LV) also doesn't include a courtesy car or breakdown cover.  Generally, we've found LV to be pretty good - we've had a number of car and house policies with them over the years, but this seems an outrageous cost given the car, personal circumstances and usage.

So off to one of the comparison sites I went. Trying as much as possible to give details for a like for like policy (not always easy), plus adding the option for a courtesy car if ever needed, the quotes rolled back in.

The cheapest quote came in at £147. That's £254 (63%) cheaper than she's been quoted by LV. Granted it was via a company I'm not familiar with. Some of the less familiar brands in comparison site results are often underwritten by one of the big boys - this one was owned by a broker an underwritten by Ageas who are pretty well known. The first well known name in the list (Churchill) comes in second at £165. There are a further sixty-six (66) quotes below her quoted renewal price with LV.

Now I fully accept there are many people out there who are loyal to particular brands, and that comparison sites don't always tell the whole story. I've had to claim with LV on two occasions in the past and found the process and their customer service exemplary, but whether it's worth a 63% premium is questionable.

Companies will also offer significant discounts to new customers rather than existing, loyal customers. Lure then in, and then hope that many will just stick with you. Insurance companies, and other companies - utility companies are the same,  rely on compliant, loyal customers who just renewal without questioning.

I'm betting, and I'd lay my house on this, if she rings LV to ask if they can reduce her premium there will be some wiggle room. Perhaps not much, but there will be some. It's also possible (though perhaps I won't put my house on this), that if she provides a like for like quote, it's possible that they might match it - I had some success with that on a house insurance quote (with another company) once. But even if they can't match it, she has the option to walk away. She won't lose anything - she can still get the same level of insurance, but she will gain - up to a £254 saving.

I'm also certain, that all things being equal, if she chooses to change, next years policy quote will also demand a new comparison search, but frankly, it's worth doing.

And the moral of this story is, the renewing any insurance policy (or utility), don't accept the first price you're given. Take the few minutes (and most of us have got some minutes at the moment) to run a quote through a comparison site. You just might be pleasantly surprised. If you don't, it's money down the drain.

Automatic insurance renewal - money down the drain
Just as an aside, when using one of the big comparison sites, remember that some companies aren't always listed, so you might want to go to heir site direct for a quote. As an example, Direct Line and Aviva won't appear on the moneysupermarket.com comparison site.

Until tomorrow....

#isolationlife
#stayhomesavelives

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