Why do insurance companies do this?

[Pale Rider]

I've just had the now usual run around to renew my car insurance.

Renewal arrives in the post - £377.

Run my proposal through a comparison site - £303 - same company, same cover.

Ring company, and after a bit of faff, they match the comparison site price.

The same thing has happened in previous years when I've decided to clear off and renew with someone else.

Given the cost to the company of a conquest sale, it seems barmy to me to try to overcharge existing customers.

I don't expect a huge whack off the comparison site price for being an existing customer, but they should at least offer me the same price without me having to ask for it.

 

[Pale Rider]

[QUOTE 3201968, member: 259"]Because some (most?) customers are lazy and don't think about shopping around for financial services so they'll get their increased profits from them.[/QUOTE]

That does seem the most likely explanation.

But shopping around is now so easy.

GoCompare store my details, so all it took was to log in to their site and a couple of clicks.

I'm as lazy as the next man and wouldn't have bothered doing any more than that.

 

[Wafer]

Yeah, enough people don't bother shopping around that it obviously works. Halved our house insurance when I got my hands on the details and did some shopping. GF is one of those who didn't realise how much she was being ripped off by just renewing.

 

[Globalti]

For the last four years I have simply rung the insurance company and told them:

"You've tried to increase my premium by X percent. This is unacceptable when insurance costs are actually coming down. We haven't made a claim either. If you insist on increasing it, I will go to somebody else."

And the last four years they have said:

"Oh okay Mr Gti, let me chat with my manager..... yes, (s)he says we can do it for the same as last year"

Liars, all of them.

 

[ianrauk]

It is pathetic for the companies to do that, and they all do it.
Every year I go through the same thing with my house contents and buildings insurance. They send a letter, it's more then the previous year. I call them up and say I'm off to pastures new, they offer me same as previous year. If I find cheaper then I am off. I have no loyalty to insurance companies.

 

[Nigel-YZ1]

It's all just part of the game. I've just been charged £75 to change my address.
Now which meerkat shall I have next?

 

[stowie]

My insurance went from around £500 to over £800 on an automatic renewal notice. The price comparison site took the same details and gave me a renewal of just under £500. I went with another company from the comparison website because they had protected no-claims for about the same price. I can see companies edging up the prices to make a bit more money out of people not bothering to check, but when it goes up by this much, who wouldn't have a quick check?

My home insurance used to do exactly the same until I got bored of the game and didn't let them requote before taking another policy. They were really miffed so I explained to them that I don't expect to have to spend my time keeping them honest in their quotes, and then giving them another chance when they clearly have tried to overcharge.

 

[helston90]

Is shopping around that easy for everyone? It is for "us" folk with t'internet etc. but my grandad doesn't have a clue on how to use one/ what to do- I now find myself coming up with quotes for him for insurance stuff but if I wasn't around/ paying attention to when his things needed renewing he'd just direct debit to the AA year in year out.

 

[Pale Rider]

I suppose the insurance companies' marketing teams have researched this to the nth degree.

In other words they know that more people will pay the renewal without question than check, so it's worth their while to hack off the customers that do check.

 

[Nigel-YZ1]

I'm considering charging Esure £100 for me reading their letter confirming they're charging me £35 to change my address.
I can change an address on a screen in 20 seconds, but it took me longer to read their letter. My time is valuable!!

While I'm on the soapbox: Why do I have to pay a £35 'reglazing fee' for changing lenses in glasses when they send them to the same lab in Barnsley as all the other opticians?
I've got to compensate the poor dears for not throwing £250 worth of titanium in the bin and spending another £350 on the same thing from them!! grrr...grrr... grumble....eep...

 

[Pale Rider]

A small point, but if you decide to go elsewhere don't tell the existing company you want to 'cancel' the policy, be careful to tell them only you do not wish to renew it.

Two reasons, if they take you at your word and cancel it you may be (unwittingly) uninsured for a few days.

Secondly, insurance companies will charge to cancel, but they cannot charge for letting the policy lapse by not renewing.

 

[pplpilot]

Every year I go through this with the bastards. They do rely on peoples inertia. When I call up to cancel they always reduce the price to keep my business.

Sorry but you had the chance to keep my business when the renewal was sent out.

 

[ayceejay]

Not only insurance companies. In Canada there are a number of phone companies all vying for your business so if yours ups the bill you call and say you are thinking of going to one of the others and down it goes.
Further to Pale Riders post when you start a new insurance there will be a question asking if you have ever been refused insurance by another company if you answer 'yes' you will be refused by this company too. Just be careful if you are thinking of telling that meerkat to stick it up his azz.

 

[ianrauk]

Not only insurance companies. In Canada there are a number of phone companies all vying for your business so if yours ups the bill you call and say you are thinking of going to one of the others and down it goes.
Further to Pale Riders post when you start a new insurance there will be a question asking if you have ever been refused insurance by another company if you answer 'yes' you will be refused by this company too. Just be careful if you are thinking of telling that meerkat to stick it up his azz.

The same in the UK.

 

[Over The Hill]

I insist on 10% under the new figure or I go elsewhere if anyone tries that. Got to show them who is boss.

I have found it by far the best option to have most policies with my high street broker. They work for me and find me the best deal each time. Far better prices than on line too.