Short insurance story | Legal matters | Back Room Forum

Tue 31 Jan 2017 09:37

Short insurance story - Schrödinger's Cat

Last year I was insured by a well known company. Towards the end of the policy they automatically sent me an invitation to renew, along with a very uncompetitive quote.

I used comparison websites to find a much better quote, coincidentally with the same company. I decided to go ahead with that policy instead.

While checking my online bank statement I noticed that a couple of days after buying the new policy there was also a charge for the uncompetitive amount on my credit card. I called the company and they "kindly" offered to cancel the unwanted policy "free of charge" but it will take approx 7 days for me to receive my money. Their excuse was that their standard business practice was that the policy was set to automatic renewal and it was my fault that I didn't read all the documents they sent me.

I'm now in a bit of a pinch because I didn't expect to have that money missing from my bank account. I never heard of automatically renewing car insurance policies. They didn't send me any documents, only a link to documents I can download. To be fair, I double checked and the docs do say that they will automatically renew but that was the only place it was mentioned, there was no mention in the (single) renewal email.

I'm pretty confident that if I hadn't picked this up until much later or I had made a claim I would have lost that money and the second policy would have been voided at my cost. You would have thought that they could automatically detect an issue when two policies are issued for the same named driver, date of birth and vehicle.

Whenever I hear the term "standard business practice" I know that means something made up for the benefit of the other party.

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Tue 31 Jan 2017 10:22

Short insurance story - SLO76

It's (as they say) standard business practice for the entire insurance industry and there will have been an opt out on your origional form you filled in online or an option to halt it mentioned in your documents.

The reasoning behind it is two fold. Partly it makes business sense for them as a surprisingly large percentage of people will simply allow it to renew rather than make the effort to shop around and partly in order to save you from the cost and consequences of forgetting to renew on time.

Moral of the story... look at your documentation and read before you sign anything. I find Direct line quite sensible regarding auto renewal, the quotes are rarely much different from the year before though there have been exceptions.

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Tue 31 Jan 2017 10:25

Short insurance story - Palcouk

Its commonn practice for any Policy to be set for auto renewal, it would have said so in the original documentation and any subsequent renewal reminder, although you may have needed to view the online documentation.

You could call your bank and disbute the transaction, allthough since you apparently used a debit card you would have to tell a white lie.

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Tue 31 Jan 2017 12:16

Short insurance story - Schrödinger's Cat

In response to all the comments thus far:

I don't need to dispute the transaction because they already offered to refund the money.

I paid last years premium by debit card and I am 100% certain I never selected automatic renewal. I expected it to be a one off payment. It was a big surprise to see on my bank statement that it was a "recurring" debit.

I did in fact read all the documents they sent me. I didn't remember the small print on last years documents and usually I don't re-read insurance documents unless I need to clarify something or make a claim.

The argument that this is "industry standard"/common practice is just another way of hiding sharp practice. The fact is I obtained a far cheaper policy through the same provider and they should have noticed that I already had a policy with them before renewing the old one.

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Tue 31 Jan 2017 14:29

Short insurance story - FP

"... I am 100% certain I never selected automatic renewal."

You may well not have done, but you may not have un-selected it; automatic renewal was probably the default.

"The fact is I obtained a far cheaper policy through the same providerand they should have noticed that I already had a policy with them before renewing the old one."

I don't think you can assume that this sort of joined-up thinking actually happens. It is arguable whether it should happen.

However, I agree that the whole situation is loaded against the customer, from the initial failure to provide the company's cheapest renewal price, to the automatic renewal. It is the reciprocal of banks quietly dropping interest rates for existing savers, while at the same time offering a one-year bonus to new customers.

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Wed 22 Feb 2017 15:21

Short insurance story - RafflesNH

In response to all the comments thus far:

8<

The argument that this is "industry standard"/common practice is just another way of hiding sharp practice. The fact is I obtained a far cheaper policy through the same provider and they should have noticed that I already had a policy with them before renewing the old one.

I have had this happen to me several times over the years, and after getting a cheaper quote online with the same insurer, I simply telephoned them and after explaining the anomaly, they happily agreed to match the quotation. Honest John has had much to say on this subject of insurance premiums over the years, so I will not seek to revisit this particular bone of contention here!

As to recurring credit charge authorities (CCA), again, I have had this situation many times, and now find it to be the norm. Whenever I am unable to continue with my current insurer due to a more competitive quotation elsewhere which they will not match, I then ask them to cancel my CCA, which they have then done without any further issues.

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Wed 22 Feb 2017 15:56

Short insurance story - SLO76

Strange. Every time I've taken out a policy over the phone they've asked me if it's ok to auto-renew and well before they do next year they send a renewal quote which again states they will automatically renew. Which firm was it you used again? Seems like their customer communications could use work.

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Wed 22 Feb 2017 16:57

Short insurance story - TedCrilly

How many people forget all about renewing their policies on the due date and would otherwise find themselves without cover? On this basis you could argue the arrangement works both ways.

My policy auto-renews but I get a letter a month or so in advance reminding me of this and asking if any particulars have changed. Its been this way for years.

As ever.....its your responsibility to read the small print and fully understand the Ts&Cs.

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Wed 22 Feb 2017 19:46

Short insurance story - glidermania

Now I know why some people have difficulty in their lives. Only a few minutes ago I was reading an HJ Q&A where someone had to ask "what is the warning light on the dashboard of my Volvo telling me?"!

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