/ Money

Fed up with the insurance auto renewal merry-go-round?

A carousel on a beach front

We’ve recently heard that the Financial Conduct Authority is going to launch an investigation into car and home insurance companies, to make sure they’re treating their customers fairly at renewal time.

The Financial Conduct Authority (FCA) is going to look at the way that insurance companies regularly offer their existing customers higher premiums at renewal time than the premiums offered to new customers.

There’s a fear that certain groups of people, for example those who don’t have the time or ability to shop around online, are being penalised for simply accepting their renewal quotation.

When we carried out our own research on insurance renewals last year, you told us you were tired of playing the renewal ‘game’. I’m sure most of you would prefer to be rewarded for your loyalty with lower premiums.

However, many loyal customers told us that their insurers offered new customers rates that were several hundred pounds cheaper than their renewal quotes. And others told us that when they shopped around and found cheaper quotes, their insurers would often match that price.

But should you have to work so hard to get your prices down if your insurer can clearly insure you for less?

Playing the renewals game

On top of the problem of expensive renewal quotes, there’s also the issue of insurance policies that automatically renew. Insurers will often renew your policy automatically, usually at a higher premium rate, if you don’t inform your insurer that you want to cancel it by a certain date.

Insurance companies will write to you or call you in advance of the renewal date to let you know what your new premium will be, and ask if you’re happy to renew. But how easy is it for people to miss this letter in the post, or forget to cancel in time? To make matters more difficult, insurance companies won’t usually tell you the previous year’s rate – making it difficult for you to compare the new price with the old one.

Still, insurers maintain that auto-renewals are helpful for time-pressed policyholders who may not have the opportunity to re-arrange their cover.

So how do you find your way around the insurance renewal maze? And what’s your opinion of automatic renewals? Is it a sneaky trick, or a useful time saver?

Pam Thompson says:
26 November 2014

it is morally and ethically wrong that a company can say “give us £XXXX and if you don’t actually tell us that you won’t, we’ll take it from you”.I got my renewal from Hastings Direct, for £255.99. An increase on the previous year for no reason. I do a piddling 2000 a year. Yes, 2000 only. I have no speeding tickets, my car is always MOT’d etc and I have no criminal convictions. For them it’s money for old rope. In any case, the cats knocked the renewal letter off the side and the new dog tore it up so I went on facebook and told the company that I wouldn’t be having the insurance because I’d gone on a comparison site and with the same company, was quoted £147. I pay for the full year. So on the 11th November this year, they took the money from my card, even though the renewal date was 22nd November. THEN on the 25th November, they took out the £255.99, leaving my account overdrawn and I got charged £75 for 3 unpaid direct debits!!!!!
I have just been on the phone to Hastings and they will be refunding the £255.99 but in 5 days because that’s how they work. So no doubt more direct debits will be refused costing me even more money! This is a SHOCKING way to do business. Tesco doesn’t send me loads of groceries and charge me for them, just because I shopped there last month and this is no different! I am on a very small fixed income and I am already £75 down. If more direct debits happen, I’ll be charged £25 for each one and will go into next month with my whole month’s pension gone on fees with no money left to buy food for myself. I doubt that anything will ever be done to stop this theft because rich and powerful people have no morals, they protect their rich and powerful insurance owning chums and regard us poor saps and mere profit earning numbers and not actual people. The whole financial system is corrupt and morally and ethically bankrupt!
I am sitting here freezing cold with no money available to buy a sack of coal (my only heating source is the old range). I have no food in the house but some cheap packets of noodles and this is how I will have to live for another month, freezing and starving. Isn’t life in the 21st Century UK wonderful?

Insurance companies are, not to put too fine a point on it, utter scum bags. Completely without ethics or morals. Every single year they try to renew my policy, and occasionally are even stupid enough to take an unauthorised payment. And every year I point out that I had previously informed them in writing at the point of purchase that renewal was not authorised, and that I therefore require £50 compensation for the inconvenience their unauthorised actions have caused.

They always, always deny that I told them I didn’t want to renew. Without fail. You can predict this response as easily as you can predict the sun coming up tomorrow. That’s when I ask them if in that case they received my proof of no claims?, since the policy would have been invalid without it? When they say yes, of course we received *that*, I then go on to point out that my instruction not to renew was written on the same document, in red ink, along with a note informing them that I will charge them £50 if they fail to follow my instruction not to renew and not to accept my business if this is a problem. At this point, they invariably pay up. Only one has been stupid enough not to (Arnold Clark insurance), and they ended up having to pay me £200 compensation when I escalated the matter went to the FSA.

I see that insurance companies paid the Conservatives a total of £5 million since the last general election. No doubt so that the government would continue to turn blind eye to the way that the “automatic renewal” scam is used to rip people off. Many of which people, like me, made their instructions clear, even though they may not have been as prepared as I’ve learned to be to prove the steps they took. Insurance companies will continue to trot out the old lie that their actions are somehow meant to benefit forgetful consumers who would otherwise simply be too stupid to make informed decisions about where and when to purchase insurance. In reality, we can all see from experiences like mine every year that it’s actually about providing them with plausible deniability when they try to rip customers off by being selectively deaf when failing to follow their instructions not to renew. Claiming that renewal is about helping customers is like ordering your groceries online from Tesco. Then finding that you’ve been billed for and sent more groceries the next week, with Tesco claiming it’s for your own good as you’d only starve to death if they didn’t send you food you hadn’t asked for.

As I say, scum bags. Who only get away with their behaviour because they’ve paid off politicians to be able to break the law. I run a business. If I took payment from my customers without their consent, I could expect to be prosecuted for fraud and face a criminal conviction. The worst that happens to these charlatans is they get told to pay back what they’ve stoled, and occasionally have to pay compensation to the odd prepared consumer like me. Where is the incentive to behave ethically in that?

Tony P says:
16 February 2015

I’m glad to see that this subject thread is still available but sad that still nothing has been done to control insurance companies automatic renewal policies.

Here’s the latest news my insurance company HALIFAX HOME INSURANCE (HHI) is trying to suggest to me for BUILDINGS & CONTENTS insurance renewal. (Whilst I was aware about the changes to the law about car insurance that may partly justify that automatic renewal is worthwhile in these cases: which I personally still disagree with, I wasn’t aware that it was also a factor in the voluntary buildings and contents insurance market!)

First the background: I took B&C insurance out with HHI in August 2013 for £568.12. I’ve previously always paid insurance premiums by credit or debit card in full but as HHI offered a no interest monthly payment by direct debit this seemed to make practical sense. As I always do I scrutinised the web form that I completed to purchase the cover and am confident that at no point was a clause bought to my attention that this policy would automatically be renewed. Whilst I wasn’t specifically looking for it, had I come across it I would have revoked it as I always do with car insurance.
So when it came close to renewal as always I started shopping around and found an identical policy with iGO4 that was only £315.50! Wow I thought, what a saving so of course I took out this policy, not thinking that I had to take any further action with HHI.

For irrelevant reasons I haven’t been checking my bank balances as regularly as I should and didn’t spot until January that HHI had continued to debit my account with INCREASED monthly payments totalling by that time £403!! (They had increased the annual premium by £130!!)

I immediately rang HHI, asking how this had come about. I advised HHI that I had checked all of the policy documentation that I received when I took the policy out as well as the policy booklet and automatic renewal was not mentioned anywhere! I didn’t get an explanation but instead a very apologetic guy who said he would send me the forms to claim a refund for dual insurance.
He advised me that in cases of dual insurance both the insurers pay half of the refund. So I questioned this and asked if I was going to get a full refund which the guy implied I would.
I’ve finally received the paperwork from HHI and it states something different “…In cases of dual insurance, it’s USUAL for each insurer to provide a 50% refund of the premiums you have paid to THEM, during any period of dual insurance…”

In other words, as the period of dual cover was six months, I will get half of the 6 months cost of my premium back that I paid directly to/ from iGO4 and the other half of the six months from HHI. So given that my new policy this year was less than half the price of the ramped up auto renewal policy that I never consented to I will be out of pocket by £151!!
I’ve now written to iGO4 asking them why they should be liable for anything given the conduct of HHI, and I’ve written to HHI stating that I dispute their ‘usual practice’ and demand a full refund of the £402 they have deducted from my bank account without any authorisation.

Finally, whilst this wasn’t an Internet based policy I’ve gone online to see what HHI say on their website. Interestingly it states that in the case of insurance policies they will NOT automatically renew policies paid for by debit or credit cards but they WILL automatically renew those financed by direct debit payments!! How confusing is that. Is that perhaps why they offer 0% direct debit agreements when others charge for this?

[This comment has been edited for the use of defamatory language. Thanks, mods]

Clifford Herman says:
18 February 2015

I personally think that insurance companies exploit customers by providing an opt-out option rather than an opt-in option when it comes to renewal. Very often people forget to contact the insurer, as I have, and end up paying the renewal costs and being penalised when you wish to cancel. I think its unethical and the Financial Conduct Authority should put a stop to the opt-out fashion these insurers offer. I think an insurance company has the right to enquire whether the customer wish to renew, offer a competitive deal, and wait for the customer to let them know if they like the deal. If the customer does not contact them, the insurance should not automatically renew. Companies knows that when there is an opt-out option, the customer has to contact them to cancel, and this way they have the opportunity to haggle their way back into your life and force you to go with their deal. It’s wrong and I hope the FCA does something about that too.

Jonathan says:
1 June 2015

I’ve just been hit with a ridiculous auto-renewal quote from Quote Me Happy (ironic name)

I was paying £94 per month with them for a full 12 month term, no claims made. When renewal time came, I happened to be on holiday. They notified me via 1 email, which is easy to miss if it goes into your junk folder with all the spam.

The next month I saw £192 debited from my account. £192! On checking, they had automatically renewed my insurance at a premium of £192 per month!!! More than double what I had been paying with them the year before. Total and utter rip off.

What’s more, I turn 25 in October, which is bound to affect my insurance costs. A quick search online and I managed to find a policy for £570 for a full YEAR! Needless to say I’ve gone with this one and cancelled that extortionate renewal.

Nothing like repaying loyal customers Quote Me Angry. Thanks a lot

Jonathan, loyalty rarely exists. Except perhaps through a broker – my car is up for renewal and the broker searched the market to find the best for my circumstances. This year it has gone up from £221 to £231 (sorry!). Their fee for the service is £12.50. They look at my needs and the policy terms before making a recommendation. So it might be worth trying that in future

Lee smith says:
25 June 2015

I received a letter from Budget asking fir a copy of there fixed loan agreement to be posted back or I would have a £15 fine imposed ! This is the only letter I have had regarding renewal of my contents insurance. So I checked back on my emails and there is two previous emails regarding renewal but I haven’t read them.
I phoned budget to cancel the policy but guess what I can but it will cost me £35
I never asked for this to be renewed ( didn’t ask last year either and had the same problem but let it go thinking it was too much hassle ) does anyone know how I stand or do I have to pay for this ?
Help please

Has any progress actually been made on this? I’m happy to shop around, but I do NOT want a policy that automatically renews, I do want to be able to opt out during the initial purchasing process, and I do want to be told clearly – and certainly well before I’ve almost finishing the process of making a purchase – that the insurer has adopted this sharp practice and offers no opt out until renewal time, especially if it’s then obfuscated on the renewal documents.

An advantage of automatic renewal is that if you forget, or overlook a reminder, you do not inadvertently drive around uninsured. Insurers should ensure they remind you in plenty of time so you can shop around if you choose not to renew with them, and last year’s premium should be shown so you see the size of any increase. Still the best bet is to put the renewal date in your diary, calendar or on your computer as it is still your responsibility to ensure you are properly insured.

It’s not just the people who can forget to renew their insurance. Towergate forgot to renew cover for a charity that I’m a trustee of and our Secretary failed to spot this. Fortunately Towergate realised their mistake and extended our cover for a few weeks and we have now switched to a different insurer.

I can see the benefit of automatic renewal of insurance but I suspect that some companies use this as a way of pushing up premiums in the hope that they are not noticed. Santander did this with my home insurance.

RP says:
8 April 2022

You clearly missed the part about insurers renewing policies even when they’ve been told not to. Auto-renewal has zero benefit for the customer. If they were that concerned about us being uninsured, why not have an automatic system that shops around for the cheapest insurance every year and automatically switches drivers to the most competitive one? Let money supermarket or somebody auto renew, not self-interested individual insurers. Or would that not suit the insuarnce companies’ real and obvious motive of shilling their overpriced crap to consumers without true informed consent?

I forgot about the renewal as I was searching for a new vehicle at that time. When I realised they had auto renewed it was around two weeks later. I was ready to trade in my Golf 1.9se tdi for a Golf 2.0 tdi cabriolet. I phoned my insurer and explained what had happened and to see if they could transfer the vehicle details, they said not a problem. I was paying around £350 a year fully comp on the Golf 1.9 se tdi and when they re-quoted me for the new vehicle it was £899.00 on top of what I am already paying, that’s around £1250 for the cabriolet. I told them that was ridiculous and I had quotes for under £400. They asked straight out if I wanted to cancel and of course I said yes because I was not prepared to pay that price. They cancelled within seconds and that was that. I was only into the renewal for two weeks and now they want £75.00 for cancelling. I feel that I was pressured out of the insurance policy because of the high price and that they would win with profit either way. I have over 20 years no claims but cant prove past 12 years and I am 50 years of age. I have not paid there demands yet and its gone to recovery. Do I need to pay this or have I a case for unfairness. Just feel done by donedeal.

Karl, one advantage of autorenewal is that you were not driving around uninsured for a few weeks. Did the payment they requested cover the cost of the insurance for those weeks?

I think it’s £50 cancellation and £25 for the two weeks I was covered. I would have stayed with the company had the change of vehicle price not been so high. I feel they have to justify the high cost of the new vehicle insurance as the top 15 companies wanted under £400. I chose AA for £385. Compared to £1250 donedeal wanted.

My friend telephoned Santander on my behalf to cancel my home polcy which went up 50% ! They ignored it and renewed against my instruction. Surely this is theft? The credit card company Capital One have been instructed by me to refuse payment . The whole finance industry is a corrupt racket.

James P says:
18 August 2016

I’m wondering why nothing has changed – this article a was 2013. Seems the rip off renewal strategy by car insurers is alive and well. I have just cancelled Admiral who are masters at ludicrous price increases. When will the FCA do something about this?

The review I have been posting everywhere I can:

A 7 year customer of Admiral.nevery year the same nonsense with renewal:

– ask for auto-renewal to be removed
– policy is auto-renewed
– price goes way up
– have to phone in to get them to reduce premium
– they reduce it

This year the auto-renewal was £977. The first phone call after auto-renewal (said I was taking up cooling off period) and it magically dropped by over £200 to £774. This was about 4 minutes into the call.

Found another policy for £635. Over £300 less than Admiral’s original renewal price. Cancelled it. Amusingly I received a call to upsell me their black box service for existing customers 3 days later “do you have access to customer notes?” Yes I do. “Have you read the notes on my record?” Oops. Looks like you’ve cancelled. Sorry!

To Admiral if you read this:

How awful to say after 7 years as your customer I felt satisfaction in cancelling and no longer being your customer. Although it is an industry-wide issue, the attempts to rip off customers at the point of renewal every year are so tiresome. You actually manage to breed disloyalty by acting in this way. Although churn is an industry norm, I would imagine the administrative cost of multiple calls to an agent, emails, policy changes and complaints all add up – perhaps you could look at these costs and reasses your approach to pricing renewals.

I do hope at some point consumer pressure and/or the regulator solve this farcical renewal situation. Admiral should be ashamed of their strategy and treatment of customers – I am ashamed of you and it does not reflect well on your brand.

2019 and still no change. Yesterday I phoned Hastings Direct and explained that while I was probably going to stay with them I didn’t want to automatically renew. Did they listen? In a word, no! Take automatic renewal out of the mix and I could’ve sorted the changes from what I entered into Go Compare in 2018 in less than five minutes without the stress of an appalling phone connection with the addition of background chatter and an advisor with a diploma in speed talking. If I’m so busy how come I’ve got twenty minutes to spare to achieve absolutely nothing? My request not to automatically renew was ignored and the amended quote for insurance I’m not sure meets my needs for the next twelve months is on my on-line account with the message it will renew on September 30. If insurance companies want to keep customer payment details then customers should also be able to access these details on-line for future amendment or deletion, that shouldn’t need lengthy negotiation or government involvement. Should automatic renewal even be legal? We’re told to check proposal form details before renewal so how do insurance companies know we’ve done that before automatically renewing? Seems we’re all to busy to enter payment details but have plenty of time to review a form (that’s if you have a copy) of a document filled in, in some cases, several years ago. For all the encouragement to check quotes, personal circumstances and whether your current cover is suitable the insurance industry is rather like Hotel California, “You can check out any time you like but you can never leave”.