Watch out for insurance companies that automatically renew your insurance at the end of the year. Its a total Con.

Firstly the renewal premium is often not competative, in fact I've just had a case with Bennetts motorbike insurance where it was 50% more than a new policy.

Secondly, even if you ring in advance to cancel automatic renewal, make sure it really has been cancelled. The same company didn't cancel my automatic renewal even though I had already rung them and now I have 2 policies! Great

Finally once the automatic renewal has been processed they then charge you a cancellation fee.

Wouldn't it be wonderful if we could all avoid using companies with such policies and watch them go out of business.

It might be an idea for a sticky to list the companies and brokers that engage in this odious practice.

As is well documented i work for an insurance company that "engages in this odious practice"

Firstly we cant auto renew your policy without giving you prior notice.

All renewal quotes are sent out well in advance (at least 21 days) and they confirm that the policy will automatically renew, it will also confirm how (direct debit, credit card etc).

Even if the policy renews, you will get a letter to confirm this and then there is also a 14 day cooling off period in which you can cancel the policy without penalty.

I'm sorry but you get 21 days before the renewal date and then a further 14 days afterwards in which to cancel the policy so this is plenty of time to get this sorted out.

Obviously mistakes do happen and with the postal strikes back in October we had many renewal quotes and acceptance letters go missing so we had to use our judgement if someone called in to cancel outside the 14 days but as a general rule the consumer is given plenty of time and notification to make a decision and contact the company.

In regards to the premiums not being competitive, most large companies (including ours) has a retention or "cancellations" dept who have extra leeway with the renewal quotes so can often negotiate a better quote if the customer isn't happy. As the old saying goes , if you don't ask, you don't get.

DA

Hi, You make it sound as if automatic renewal is there for the customers convenience. I'm afraid I simply can't agree. I didn't ask for Bennetts to auto renew when I took out the policy and they have now told me I can't opt out of it until the 21 day renewal period next year. Some choice! Lets face it automatic renewal is not there for the customers convenience, if it was we'd be offered competative renewal rates, not be penalised with cancellation fees and be able to opt out of it.

More likely its there as a means to keep your business (greed) and so insurance companies take advantage of it and don't offer a competative renewal (even more greed). In my case I did ring them and they couldn't reduce it. Yet on their own website on the very same day I could find the exact same policy 50% less!

Also in my case I told them I didn't want to renew, yet they still went ahead. Cheeky blighters.

Mind you thats excellent advice about the 14 day cool off period. I appreciate that. I'll ring them back to discuss this, since when I first rang to complain that my policy had been renewed it was within 1 week of the renewal date. Wish me luck. Then again I might just give up and let them win. Life's too short to have to deal with such idiots!

All renewal quotes are sent out well in advance (at least 21 days) and they confirm that the policy will automatically renew, it will also confirm how (direct debit, credit card etc).

 

Even if the policy renews, you will get a letter to confirm this and then there is also a 14 day cooling off period in which you can cancel the policy without penalty.

 

I'm sorry but you get 21 days before the renewal date and then a further 14 days afterwards in which to cancel the policy so this is plenty of time to get this sorted out.

 

 

DA

So the fact you give 21 days notice makes the practice ok? I don't think so. Why should I have to run around informing the insurance company that I don't want them to insure me at the conclusion of my 1 year contract? Auto renew is nothing more than a mechanism to make life easier for the insurance company, and the companies know full well that most people won't check the finer details of the renewal.

It reminds me of the way the old Britannia Music company used to operate with their "recording of the month". It was up to the member to notify them that they didn't want the recording of the month, rather than notify them that you did want it. Such an absurd system, just like auto renew is, from the consumers perspective.

I forgot to mention in my last post that our sales guys do have to ask you if we can auto renew your policy the following year, its in our scripts. Its also in our renewal scripts when paying renewing over the phone as well.

In regards to whether auto renewals are right, i guess it all depends on your point of view. From a consumer point of view i can see your point in that it shouldn't be forced onto the consumer, but as i said above ,this isn't the case as the consumer will always be notified. I can also see the benefits of auto renewing policies.

E.G 1) Mr Smith who's 80 years old, been insured with the same company all his life and has no intention of changing. Every year he just checks his docs to make sure there's no errors and then just leaves the policy to go through without lifting a finger.

E.G 2) Mrs Smith, going away for a holiday for 2 month and a week before she comes back, the policy is due to renew. Is happy for the policy to be auto renewed so she has cover incase anything happens and is also safe in the knowledge that if she doesn't like the policy when she returns, she can cancel it under the cooling off period and not pay a penalty.

People nowadays are getting very cynical and are always expecting the worst from companies. True there are some very dodgy people out there that will try and screw you the first chance they get, but that's what the regulatory bodies are for. When things go wrong, they can be put right again.

DA

I think that auto-renewing policies is important, especially for compulsory insurance cover such as motor insurance. Otherwise a customer might forget to renew their policy and then find they're not covered.

As long as the documents are sent out 3 weeks in advance of the renewal date, I don't see a problem with it.

I have just fallen foul to this practice the 14 day thing is intresting maybe that is why when i called they said they would need to call back on Monday I can see why SOME people could find it useful but I'm with (and now stuck with a large insurer and the was no text box or question about auto renew and if it is for the consumer then why are the policies so expensive and then once set up your told you'll have to pay to cancel the policy I had no 21 day letter be it the fault of royal mail or the company them self i had no notice then when i had the letter to confirm the policy I was not told of any 14 day just fobbed off while they looked into it and the outcome it will cost me to cancel the policy.

I asked about auto renew and was told if you pay by direct debit your policy your policy will auto renew.

So it works like this as far as i see it:

We have your details so we will renew your policy at a cost that suits the company if you don't it will cost you to cancel a policy that I didn't want all due to the fact you have my details.

Very consumer focused

If you cancel within the first 14 days "cooling off period" then they take no premiums. I think the problem is that the insurance is controlling you and not the other way round.

Maybe if I ask a different question, What if it is car insurance and they do not automatically renew the policy and you are involved in a car accident, who's fault is it? It's about perspective.

How much did they say it would cost to cancel the policy?

It works out to 1/4 of the value of the policy and this is not Car insurance it is contents cover so the same logic is not really there it is not an insurance needed by law and if it was not renewed and I was not covered it would be my fault it is a poor excuse to the who's fault is it at the end of the day as with all insurance if it came to a court of law it would be the responsibility of the person needing the cover to arrange cover. As there is a choice with an open market of different insurance companies no company could be held responsible.

Even if the company is doing me such a “favour” why is the premium higher than any other like for like quote even with the same company.

the same logic is there, just not the situation, I never said the type of insurance and nor did you in your earlier post.

The next question, is what if they didn't send out anything and stopped the insurance and you had a claim for say a television being nicked. Would you argue the same way?(do you see where I am going on this thing?)

Certain things appear evil but yet if they were the opposite, the company would be damned. They cannot win whether they auto renew or auto cancel at the end of 12 months. Which system do you think works so that the customer is not damned and nor is the company?

If I don't renew I have no one to blame, that would be my fault I can't blame a company for not acting on my behalf I had already prepared new insurance quotes ready but the first notification I got was to say they had set the policy up I have challenged this and no "cooling off" period was offered

I can not blame people for my inaction. Where my gripe lies is that they have acted on my behalf and tied me in.

You say about making claims and cover BUT, if I had paid a one off payment last year and not paid by DD or credit card instalment they would not be able to auto renew so your argument looses validity there. They auto renew because they have my details and don’t make a competitive premium offer. (I won’t call it a quote).

Orwell72, did you buy insurance from another company to start from your renewal date? If you didn't realise the existing policy was going to auto-renew, are you dual-insured?

If I don't renew I have no one to blame, that would be my fault I can't blame a company for not acting on my behalf I had already prepared new insurance quotes ready but the first notification I got was to say they had set the policy up I have challenged this and no "cooling off" period was offered

 

I can not blame people for my inaction. Where my gripe lies is that they have acted on my behalf and tied me in.

You say about making claims and cover BUT, if I had paid a one off payment last year and not paid by DD or credit card instalment they would not be able to auto renew so your argument looses validity there. They auto renew because they have my details and don’t make a competitive premium offer. (I won’t call it a quote).

Well, if they took one payment last year they could still auto renew, yes i have had auto renew on monthly and yearly payments so speak from experience. Am not sure we are going anywhere by arguing on the minutiae of this and hypotheticals(which I have been doing). However lemon twist has asked a valid question to move things on.

Cooling off period SHOULD is mandatory on insurance products so they are wrong on that issue.

No I am not dual insured I had to make changes to my policy that now mean I have to cancel this policy to make those changes without makeing the changes and running with the insurace that I am tied to my bill is double (on the qoute the same company would have kept my business) but as they have chosen my policy it cost me more and no they won't change in house without cancelling this policy.

The posters who work for the insurance companies are very defensive of this auto renew policy, probably because in the end it pays their wages. Instead of hiding the auto renewal in the small print, why not just say to the client on the telephone, 'would you like us to set that up for auto renewal, or would you like to try and find a more competitive quote at the end of the policy'?

Simply because most of the clients will say I'll try for a better quote myself, that company then loses the business. To suggest this is for the customers benefit is a gross distortion of the insurance companies reasoning. Its about retaining customers i.e. profit nothing else.

regards

I have never had insurance renewals hidden from me. They sent the policy out to my address and gave me the option to cancel it.

I think the companies are damned if they do and damned if they don't because I can understand both sides of the argument. My example was car insurance because failure to have insurance is a criminal offence and if that person was involved in an accident they could potentially blame their insurer for not auto renewing, or sending them a reminder that their insurance is due to end. Maybe I am thinking too much about the consequences and not the problem itself.

I don't think there's anything sneaky about it - where I work the renewal documents state on the front page in large text "Your policy will auto-renew. If you want your cover to continue, you don't need to do anything", or words to that effect. It's not hidden in the small-print.

However, I think it would be a good idea if the auto-renewal was pointed out to customers when they first take out a policy, so that they are aware of this practice.

Does the policy of auto renewing only work for customers have made their payments by monthly direct debit? I can't see that it would work where customers pay the annual premium in full either by debit or credit card.

I pay annually by credit card and invariably involves auto-renewal. I scout round for quotes every year, which usually means re-insuring with a different company. So when I send the notice of NCD to the new company, I also enclose a letter stating that I will not be renewing cover in 12 months time.

Has worked every time except once, with Quinn, who denied they had received the required notice and wanted a cancellation fee. When I told them that if they had received the NCD confirmation then they had also had the required notice, the letter magically appeared on their system.

I pay annually by credit card and invariably involves auto-renewal. I scout round for quotes every year, which usually means re-insuring with a different company. So when I send the notice of NCD to the new company, I also enclose a letter stating that I will not be renewing cover in 12 months time.

 

Has worked every time except once, with Quinn, who denied they had received the required notice and wanted a cancellation fee. When I told them that if they had received the NCD confirmation then they had also had the required notice, the letter magically appeared on their system.

Just out of interest, if one year you were with a particular insurer and you were really happy with the customer service you had received from them, would you be willing to renew with them?

Have all the insurers you've used really been so hopeless/expensive that you wouldn't want to stay with them for more than a year? :grin:

Just out of interest, if one year you were with a particular insurer and you were really happy with the customer service you had received from them, would you be willing to renew with them?

I know of a company that can beat their own deal even if it goes up on year 2(unfortunately, due to a conflict of interests, my lips are sealed on here )

I know of a company that can beat their own deal even if it goes up on year 2(unfortunately, due to a conflict of interests, my lips are sealed on here )

zzzzzzzzzzzzzzzzzzzz

Thats not supprising.

With the amount of insurers now saturating the market, its becoming increasingly competitive every year so all insurers are now having to give ridiculously low quotes and "deals" (12 months for 10, free pressure washers, cashback etc) to stay ahead of the competition. Invariably these offers are only for the first year and people are now twigging on to this and are now shopping around each year at renewal to find the best deals.

DA