/ Money

Are insurers deliberately obscuring price information?

Insurance renewal

Since April 2017, insurers and brokers have been required to publish last year’s premium on your renewal letter. However, it would seem that not all firms are following the rules…

For those of you who followed our ‘Don’t pay a Premium’ campaign, you may recall that we celebrated a huge campaign win when the Financial Conduct Authority (FCA) finally agreed that insurers and brokers should be forced to publish the details of last year’s premium.

As of April 2017, insurers and brokers must print last year’s premium ‘clearly, accurately and prominently’ on customers’ renewal notices.

Missing information

When the new requirements came into force in April, we asked you if you’d spotted the changes on your renewal letters. And a couple of eagle-eyed Which? Conversation community members, John Ward and Carol Brock, spotted that their renewal notices dated 1 April didn’t include any indication of what they’d paid the year before.

John told us:

‘The renewal notice was issued on 1 April 2017 but does not include details of last year’s premium. I had hoped it would introduce the new measure at the earliest practical opportunity and not wait until the last minute [and then fail to comply].’

And Carol said:

‘Had my renewal quote for building and contents dated 1/4/17. Last year’s premium not quoted, but it has increased by £27.12.’

Perhaps these could have been forgiven as oversights on the day the new rules came in. But then in June, another Which? Conversation commenter Alan told us:

‘Just checked my cars’ renewal notice and they haven’t included any details of the premium for last year’

The FCA has now admitted that there have several examples of firms who have failed to comply fully with the rules, by obscuring the required information for example, and people may have lost out as a result.

We think this simply isn’t good enough. The intention of this requirement is to make firms to give customers a clear and accurate comparison with what they paid the previous year, so they knew what they were paying for, and might be prompted to shop around.

Treating customers fairly?

We expect the regulator to take a strong stance against companies who are still trying to pull the wool over their customers’ eyes by being less than transparent about price rises. Fines and compensation should not be off the table.

Separately, a new Which? Money investigation has found several major insurers are making it hard for customers to evaluate their renewal offers by blocking them from checking the prices offered to new customers. While there can be reasons for doing so, and insurers commonly attract new customers with discounted offers, it means some customers can’t be entirely sure that what they’re being offered is the best deal actually available. The full investigation will appear in the December edition of Which? Money magazine.

These kind of practices indicate that the financial services industry still has a way to go to improve its culture. Treating customers fairly? For every good bit of work done by firms to put their customers first and act in their interests, examples like these simply serve to question and undermine trust in the insurance industry.

If your insurance is coming up for renewal, don’t simply accept the offer from your existing provider. Shop around and compare what you’ve been offered with other companies’ prices – use several price comparison websites. Even if you’re happy with your current insurer, make sure you haggle – our survey last year found this saved people over £60 on average.

Have you received an insurance renewal letter recently – did it included last year’s premium? How easy is it for you to compare insurance prices and shop around?


My car renewal received on 1 November from Liverpool Victoria showed last year’s premium; the renewal offer was for a 5% increase, so i am now researching alternatives.

There has been an Insurance Premium Tax increase imposed by the government – from 10 to 12% – so that accounts for part of your increase. Premiums have also generally risen so a total of 5% in your case looks pretty reasonable.

My LV premium also increased so I phoned them and they gave a modest reduction that satisfied me, as I am told they are a good insurer (fortunately I’ve not had to make use of their after-sales service). In preparation for approaching them, I would suggest you get an on-line quote from them for exactly the same cover you currently have. A good negotiating point (assuming it is less than they want to charge you).

Not all insurers are the same 🙂

Very annoying how insurance companies can “play” the rules so easily. I had a renewal email no mention of last years premium, when I complained to the regulator their response did you check on the website (link in the email), it only has to be there. Not good enough in my book. If the email can state this year premium it needs to state last years too.

I got another renewal this time by letter which did have last years premium, I rang to change a few things got an updated letter with the new premium, but this letter had no mention of last years. almost like they updated one template letter but not the other.

If you’ve changed details of your policy, which are significant enough to change your premium, wouldn’t that make last year’s premium slightly irrelevant for comparison? Comparing this year’s apples with last year’s oranges.

Our buildings and contents insurance expires shortly and I have the renewal documents in front of me as I write. The covering letter sets out last year’s premium in the text – which probably meets the requirements – and gives the renewal cost which is about 13% higher. Somewhat hidden in the documentation is reference to a Renewal Fee of £20. This includes the insurance premium tax [now 12% up from 10% last year]. But the tax element is only £15 so there is an unexplained charge of £5 just for posting me the documents and processing a payment.

This prompted me to look at alternative cover and immediately, with one good insurer, found I could save a significant amount and get superior cover. I have, therefore, decided to spare the original insurer the anguish of having to process our renewal and accepted a policy from the new firm.

We had been with the first company for only two years so no loyalty was expected and none was shown. Switching has saved £36 with minimal effort and without wasting time on a comparison site

The change was from Saga to Aviva.

The renewal quote for my house insurance from the AA gave an incorrect comparison figure for last year. When the renewal arrived last year I haggled a greatly reduced reduction but the “last year’s” figure on this year’s renewal was the original, much higher, figure. This year’s renewal was “haggled down” by a considerable amount too.

I had my renewal letter through from Hastings this week and it showed a completely fictional amount paid last year – more than double the truth, with a renewal quote a little less than this. I went online and found the same policy for much the same amount as I’d paid last year in reality. Very dishonest practice!

My renewal arrived 2 days ago from The AA for £456. It did not show what I paid last year.

I used comparison websites and found I could get it at about £90 less than they were asking. I rang them and they agreed to knock £82 off!

The AA is a broker as well as an insurer. I asked what company this was with. Same as last year they said: The AA!

Each August I buy an annual worldwide travel insurance policy. I have a couple of medical conditions which have to be disclosed.
This August the renewal quote was for £92, compared to last year’s premium of about £150. However, the quote made clear I would have to have a medical screening, which would increase the cost. The quote omitted details of last year’s quote and a statement to the effect that cover was available from other providers as per FCA Rules which came into affect on 1 April this year.
On contacting the company, they apologised for not providing details of last year’s premium (actually £158) and a statement encouraging me to shop around. I wondered if I was very unlucky to be the only customer that this had happened to.
I suggested that they further breached FCA Rules by not providing an “easily comparable” quote – £158 with medical screening versus £92 without medical screening. They advised me that they were not breaching FCA Rules as they (a broker) did not hold my medical details, which were held by the underwriter and thus they could not provide an easily comparable quote. If their view is correct, this represents a large loop hole in the FCA Rules as anyone with a non-standard policy for motor, home, travel, etc., etc. may fall outside the scope of the new FCA Rules.
I referred the matter to the FCA, who refused to give me an interpretation on their own Rules and advised me to take up the matter with the Financial Ombudsman Service if I wished to pursue the matter.

I always keep a note of my insurance prices for at least 12 months so when the new quote arrives I still know what I paid last year An easy thing to do on mobile phones etc.

It is sensible to keep all the insurance documents together so that they can easily be checked in the event of a potential claim – they contain important information about claim limits, exclusions, excesses and other restrictions. They should also be kept for a long enough period after the policy has expired in case of a claim arising during the period of cover but after its expiry [most relevant in buildings cover but can also be significant with a motor policy]. Notwithstanding that insurance companies have all the policy details in an on-line ‘personal account’, it is a good idea to make copies to keep handy in case access to the computer is impossible or the website is down.

R Marchant says:
12 February 2018

I just received a renewal notice from HomeServe that said “your Plumbing and Drainage Plus is due to renew automatically”. The cost of my 2017 policy was £174.96 and the cost of the renewal was a staggering £272.40 (a 50%+ increase!). When I phoned I was told that the renewal price was actually for a higher level of coverage (that I hadn’t asked for). I consider this a very sneaky practice since the wording suggests that I would be renewing the policy I had. After much discussion about being unhappy the price was reduced to £212. I said it was still too much and the final offer was to renew at a cost of £168 (less than last year)–and to cap it all, I got the higher level of coverage for a lower price. If I had not intervened and the policy had renewed automatically, I would have been nearly £100 worse off. Crazy.

Companies that are heavily regulated and offering policies such as this should be absolutely clear in what they are offering, e.g. a simple renewal costs £x and the policy with additional benefits costs £y. So the consumer can make a considered decision without feeling tricked!

I’ve given HomeServe one last chance, but if there are any signs of ‘smoke and mirrors’ next year they will have lost a customer.

Is it worth having cover? Peace of mind is remarkably expensive. Here is a Conversation about Homeserve: https://conversation.which.co.uk/home-energy/homeserve-fined-30-million-fca-home-emergency-cover/

When considering insurance it depends partly on your willingness to cough up what may be a large amount if you have a problem. For some things insurance is clearly worthwhile – would you risk the 6 figure sun to rebuild your house after a fire for the sake of a 3 figure premium? For others it is for great convenience – if your car breaks down on holiday or on a motorway the AA/RAC et al. cover will seem well worth taking out. But for other things, consider the annual cost of premiums against the likely cost of funding a repair, or even a replacement, yourself, and how likely it is to be needed. An extended warranty on a £400 kitchen appliance will usually not pay for itself, and the consequences are not that great. How likely are your pipes to burst, and what won’t your household insurance cover? – even if they require a modest increase in premium.

Peace of mind can be worth paying for, a gross difference between loss and cost to cover a very unlikely event seems a clear winner. For £175 a year I wouldn’t touch a plumbing and drainage policy – how many problems have you had since you lived in your house and how much has the policy cost you in total?

Sneaky things everywhere to look Done in the hope nobody will notice and many don’t But those who do and know what they should have been told but haven’t complain and if they have sense look elsewhere There is always somewhere else to go to buy anything Some just accept what they are told without question about everything