Why do insurance companies do this?

[Globalti]

Nah... brokers have an axe to grind as well. I have one as a neighbour and he's a crook.

 

[Blue]

It's cheaper from an admin point of view for an insurance company to renew an existing client than it is to look for a new customer and put them on the books. Holding an existing customer will also give them a more stable stats base from which they can calculate loss ratios. All in all, a claims free existing customer should always be worth their while when allowing a discount.

Above and beyond that some companies can also be cynical rip-off merchants.

 

[sidevalve]

Also beware the "protected no claims" is also not quite as it appears. Remember the company always asks "have you had or do you have any claims pending" before offering you a quote - not just "how many years no claims have you". For example you have a claim and your bonus is protected - fine. Then come renewal time - as usual the price goes up and you try to shop around, except that now you have a claim and all the other companies will base their premiums to include that, you are trapped with your original company and they know it.

 

[TVC]

A side point, car breakdown cover sellers do the same thing, increase your premiums hoping you can't be bothered, a phone call reminds them not to take the pee.

 

[RWright]

My homeowner's insurer took the liberty of raising the amount of coverage on what I considered more than enough. The premium went up about 20 percent and the additional coverage did not increase near that percentage. I was told this is common practice, they even tried to lead me to believe it was "required". I didn't fall for it and told them I would be contacting the state insurance commissioner about this as I thought it was unfair, especially since I don't think property values have increased very much at all. I finally got it sorted without having to contact the insurance commissioner. I guess that may be a tactic they use, especially if houses are financed, which luckily mine is not.

I view insurance companies as just another part of the establishment that is there to separate me from my money, many times with the backing of a government requirement. I don't think there is anything I dislike as much as paying insurance, well there is one I can think of, paying property taxes.

 

[srw]

insurance costs are actually coming down

They are?

 

[Smurfy]

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?

I didn't even bother claiming mine! Yes it's free! But do I need a stuffed meerkat toy in the house? No I don't!

 

[Pale Rider]

They are?

Last year:

http://www.bbc.co.uk/news/business-23474426

First quarter this year:

http://www.confused.com/car-insuran...x-costs-fall-19-1-per-cent-january-march-2014

 

[Moodyman]

Insurance premiums were going upwards due to fraudulent injury claims. Since the rules around this were tightened, premiums have started coming down. The first three characters of my postcode is/was one of the country's hotspots for claims, and despite me having a clean driving record many insurance companies would not insure me.

 

[srw]

Last year:

http://www.bbc.co.uk/news/business-23474426

First quarter this year:

http://www.confused.com/car-insuran...x-costs-fall-19-1-per-cent-january-march-2014

That's prices, not costs. Slightly different. Premiums are what you pay; insurance costs are what the insurance companies pay. The main driver behind falling premiums at the moment isn't a clampdown on fraud (which has been under pressure for at least the last 10 years, steadily getting higher) but legal changes last spring. That - and intense competition for the best risks.

 

[ufkacbln]

NOt just insurance either.

For a number of things (subscriptions, utilities, Broadband etc), I now normally cancel my contract and then apply as a new customer asking for the new customer discount

Some companies have clamped down, and you cannot apply as a new customer within x months, in which case I will simply leave and go to another company, then return a year later, playing them both for new customer rates

 

[Jody]

The funniest situation was this years renewal. Can't remember the exact costs but it had gone up about 30% from my current policy. I checked on a comparison site and not only were the quotes cheaper than the current policy but my current provider was on their with a price less than I was paying. Made a quick call to the current provider (LV) and advised them of the quotes and what cost they were giving the policy to new customers. The adviser came back and said we don't match comparison sites. I pointed out again that it was their company on the comparison site and she rather abruptly said they wouldn't match their own price. So I asked her to cancel my policy and she had the cheek to ask what they could do in order to keep my business.

 

[swee'pea99]

Why? Profits. Next!

 

[ushills]

I have been pleasantly surprised this year that both car renewals have come through at the lowest available on the comparison websites, however, the excess has been reduced. I took the time to check as I always do and it appears my existing providers want me to stay for this year at least.

 

[GaryA]

...er because the whole industry is run by ruthless amoral sh!ts?