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Thu, 04 Dec 2008
With the credit crunch harder than caramel toffees at the moment, wise people say it pays to shop around. That is all very well if you have the time, energy and inclination.

I admire such money conscious individuals who, upon receiving their renewal quotes for car insurance as an example, immediately surf the net visiting all those comparison websites to find the best deal.

I find this a huge chore, taking up far more time than I had anticipated, demanding long lists of ridiculous questions, and inevitably leaves me having to pick up the phone to try and talk to a human being in person to eventually sort out whatever problem I had in the first place.

When my renewal quote comes through each year, I go straight to the bottom figure. If it has not gone up too much and my circumstances have not changed I simply do nothing for the renewal is paid automatically.

I have always believed in loyalty and have assumed loyalty is passed down to me, the customer.

I believed that with the renewal quote, was the best deal my insurance company could give me.

Wrong with a capital ‘W’. Lunching with a girlfriend of mine last week, she told me this story. Her car insurance is with Sheilas’ Wheels and sure enough her renewal quote came through; at £379. It was similar to the previous year’s but, out of interest, she did visit and, to her surprise, the third cheapest quote was from Sheilas’ Wheels offering her the same cover for £211.

She contacted Sheilas’ Wheels to discuss the level of cover and, bizarrely, one of the options she was given was “press four if you have seen a better quote on a comparison website.” There were a few differences, which contributed to a cheaper quote, like a larger excess and lower mileage, but when she altered those to match her existing quote, and chucked in protected no claims bonus, her final quote came to £259 saving her £120.

Not bad for an hour’s work. She asked why it was cheaper on-line and the answer was because she did not have to talk to anyone. Strange, since she had just spent the last twenty minutes discussing her policy with an adviser.

Taking this on board, my personal car insurance had just been renewed to the tune of £311.85. Undeterred and on a mission, I went on-line to see if I could make savings. I insure with Direct Line who do not feature in the comparison websites being ‘direct’. I painstakingly put in all the details. Low and behold, a quote of £208.95 flashed back at me. Grabbing the calculator I worked out quickly that was a saving of £102.90.

Clicking the ‘yes to accept’ button, I then transferred to building and home contents insurance that I also have with Direct Line. These currently costs me £575.19 and, trust me, I do not live in a mansion. Sure enough another flash revealed cover for £330.33 saving me £244.86. Going through the policy, it emerged it was far better than my existing one with travel insurance, ID fraud detection and assistance, plus emergency home cover chucked into the bargain.

How can this be? Surely the renewal quotes are the best deals for existing customers?

Surely loyalty is passed down to existing customers?

Sadly, not true.

The adviser explained that it was because I was a new customer that I had received a better quote.

But I am not a new customer. I have been a Direct Line customer for eight years! Not according to their website. To Direct Line on-line, I am a new customer; thereby I get lots of money-saving offers to entice me to change.

I contacted the press office of Royal Bank of Scotland which is behind Direct Line and this is the reply;

A Direct Line spokesperson comments, "Like many other financial
organisations, Direct Line offers new business discounts from time to time
to remain competitive in the market. This is in no way intended to be
detrimental to our existing and loyal customers.

The discounts we offer to our new customers are intended as one-off incentives and apply only for the first year of the policy. The premium charged at renewal in subsequent years does not result in the customer overpaying, but reflects a fair price for the policy, once the incentives are removed.

Renewal prices are based on a number of factors, including the number of years the customer has been with us, claims made, etc using the rates available at that time and cannot be compared to a new business quotation, benefiting from promotional discounts."

So, eight years as a loyal Direct Line customer equates to nothing.

I have saved nearly £350 in just under an hour without having to change insurance companies. So take my advice, do not take your renewal quote as read.

That will pay for Christmas.

Ultra Violet

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