A survey by Go Compare show half of the drivers surveyed felt it should be illegal for insurers to reserve best prices for new customers. Research commissioned by GoCompare Car Insurance, revealed that 50% of drivers think it should be illegal for insurers to reserve the best prices for new customers at the expense of loyal policyholders. It also found most (61%) survey participants feel insurers treat their existing customers less favourably by charging those who renew their cover, higher prices than new customers. The survey, which questioned 2,000 motorists, also learned that, at their last renewal, 62% of motorists allowed their car insurance to automatically renew.
Renewal Despite the FCA’s renewal transparency regime being in force since April 2017, GoCompare Car Insurance’s study showed that at their last renewal, only 46% of drivers remembered seeing last year’s premium alongside their renewal price. The regime calls on providers to clearly show last year’s premium against a new quote and to display a shoparound message. Just a third said the previous year’s premium was clearly shown on their renewal documents. Only 29% remembered seeing a statement advising them to check the cover level continued to meet their needs, and 22% recall seeing a ‘shopping around’ message. Lee Griffin, one of the founders of GoCompare, commented: “Car insurance is a market where dual pricing has existed for a long time and where comparison sites have made the practice far more transparent for people who can often see exactly how much their current insurer is discounting for new customers. “There’s absolutely no good reason why insurers should be able to do this – other than they’ve been able to get away with it. Loyal customers have every right to feel ripped-off.” Complaint Last year Citizen’s Advice listed insurance in a super-complaint to the Competition and Markets Authority (CMA) that slammed the practice of overcharging loyal customers and warned again that consumers are being ripped off. Following the complaint the Financial Conduct Authority (FCA) launched its investigation into how insurers charge home and motor customers. Earlier this month the watchdog also pledged to focus on fair pricing for customers in is proposed 2019/20 Business Plan. Griffin continued: “At renewal, car insurers offer to make life easy by continuing their customers’ cover without them needing to take any action. While this helps ensure drivers don’t inadvertently allow their cover to expire, the convenience of auto-renewing usually comes with a hefty price tag. “Our research shows that most drivers simply allow their car insurance to auto-renew – despite all the warnings of rip-off pricing.”
This article is care of www.insuranceage.co.uk
