loyal customers are losing on average £877 a year prompt action by the consumer
counts for very little these days or worse - some insurers and utility providers
regard loyal customers as fodder ripe for a rip off. The excess "loyal
stuffees" pay up on renewals goes to subsidise the competitive quotes
the providers offer in the market to those shopping around. But haggling is not
a natural activity for many but sadly one most will have to accept now if they
do not simply roll over on renewal and pay up as a "loyal stuffee".
around for motor insurance is not easy as you have to compare the scope of
the policy with your renewal cover, check policy excess amounts, check agreed
values and limited mileages, check the agreed no claims discount, check overnight
parking requirements (does the car have to be garaged when at the policyholder's
address?), check key policy conditions (for example how scrappage is handled with
a claim) and try and check the provider's claims handling performance. It can
be a tedious exercise taking hours of your time to arrive at a point where you
can compare quotes and then decide what to do. Return to your current provider
and haggle or dump them and head for a better offer.
See our earlier
NEWS items on the "loyal stuffee" topic
stuffees" continue to be ripped off by insurers & utility companies.
prepared to haggle over motor insurance renewals. 180427
Time to haggle on motor insurance
renewals. 171219 NEWS
lead BBC online news report today is "loyalty came at a cost for Nick Munday
- a cost that can be calculated as £1,250 a year. The 61 year old had been
a home and contents insurance customer with the same provider for 20 years and
was eventually paying a premium of £2,00 a year. A phone call querying the
cost reduced the premium to £750. Now the UK competition watchdog (Competition
and Markets Authority or CMA) has said millions of unsuspecting loyal or vulnerable
customers are being taken advantage of each year by firms and they end up paying
much more than they should. This must come to an end". BBC
Photo credit alongside: BBC News website
May 2018 BBC News reported "the insurance industry has pledged to crack
down on "excessive" differences in premiums for new customers and existing
policyholders. The plan aims to iron out some of the controversial big differences
between premiums for new and existing clients. The move follows new rules that
force firms to display the previous year's premium on renewal notices. The
new guidelines apply to home, motor and travel insurance, but not pet or health
of British Insurers (ABI) and the British Insurance Brokers' Association (BIBA)
say their Guiding Principles and Action Points should mean "an improvement
in the outcomes for long-standing customers". The
new commitments by ABI and BIBA members include:
supporting excessive differences between new customer premiums and subsequent
renewal premiums that unfairly penalise long-standing customers.
will take action so that customers' tendency to shop around at renewal is not
used to lead to excessive pricing differences that unfairly penalise long-standing
make clear in written, online or verbal customer communications that the new customer
premium only applies for that year and subsequent renewal premiums may be higher".
there been any real change?
of British Insurer's chairman Andy Briggs
He said insurers did a "great
job" for their customers, "but the renewal market simply doesn't work
where loyal customers get charged much more than new customers". He added
"given many consumers expect to get cheaper insurance when they shop around,
there it's no easy solution. These new guiding principles and action points are
a positive initiative by the ABI and BIBA members to demonstrate that the whole
industry recognise this is an important issue that needs to be addressed."
Shaw of Which? said: "a review of the unfair practice that sees existing
customers charged excessively steeper premiums than new customers is long overdue.
We regularly hear from consumers who are paying hundreds of pounds more a year
than new customers because they've automatically renewed their cover. Insurers
must now act with urgency and implement much-needed changes to ensure their customers
aren't excessively penalised simply for their loyalty."
BBC personal finance correspondent noted "insurers are finally owning
up to what customers have been complaining about for years: the more loyal they
are, the more they seem to pay. The extra cost can amount to hundreds of pounds
a year on a policy. People selling insurance have become addicted to the ruse
of offering big discounts to new buyers to keep business moving. If you don't
bother to shop around, you end up footing the bill. The problem with today's plan
is that it will be left up to individual insurers to decide which prices are excessive
and how to narrow the gap. Customers will still need to check what they are paying
to make sure they aren't being taken for a ride."
chief executive of Citizens Advice, said its research had found that long-standing
home insurance customers could pay an average of £110 more a year than new
customers. The new plan showed
the industry "recognises the scale of this problem and is willing to act
responsibly to stop consumers being penalised for their loyalty." BBC
comparison easier now
Fortunately the UK Government introduced a requirement
that insurers must disclose on their renewal notice the premium paid in the previous
year making a premium comparison easier.
around and haggle!
For many classic car enthusiasts who have grown up believing
loyalty had a value, sadly that is no longer the case. So shop around and haggle!