Insurance companies are really cheesing me off.

Our home contents renewal was due in March. The renewal quote came through with an increase of 30% that would be automatically applied from the renewal date. I went off to compare prices and found that I could get a slightly cheaper deal (than the pre increase price) for the same level of cover with an equally good insurer. I then rang up the current insurer (Direct Line) and they matched the quote.

Yesterday, I had my motor insurance renewal through from Direct Line. This had a 25% increase that's going to be automatically applied later this month. Having checked online, I can again get the same price I'm paying now. No doubt when I ring Direct Line to cancel, they'll match the deal but I'm not playing this time. The insurance will be going elsewhere.

This sort of inertia selling (with extra added price hiking) is ridiculous and extremely common in the insurance industry. Lots of people won't check the increase, get comparisons and then want to talk to someone to cancel an automatically renewing policy. I wonder if there is anything in consumer regulations than can be used to try to stop it?

A little explanation as to what happens when Insurers apply rating.

When new policies are sold for good risks, they are often priced below the correct rate, with a discount being applied to get the business. There is then a set increment at each renewal a customer stays with the company, to get the premium back to the correct rate for the risk.

So if you shop around at each renewal, you are buying Insurance at below the proper market rate. By proper market rate, I mean a rate which is cost effective for the Insurer to provide to cover all their costs including claims.

In regard to Direct Line, they have been hit by a massive increase in claims costs, with their profits reducing by 92%.

Be careful to check your new Insurance very carefully. Direct Line are generally considered a decent company with UK based staff. Some of the cheaper companies can be very difficult if you needed to claim, with customer service staff based offshore in India.

I actually quite like Direct Line for everything else bar their pricing on renewal policy. I really don't see why they should have a negative customer loyalty programme when, for most types of insurance other than buildings, you can get good deals from other reputable insurers.

When I said that I had found a comparable price on my car insurance, I was able to get good quotes from reputable companies. I also got much cheaper ones from companies I had never heard of and wouldn't deal with at least on our main car.

Some Insurers did apply loyalty type discount or additional cover for awhile, but they realised this did not work. Probably since the comparison sites started the race to the bottom with consumers mainly selecting cover based on the premium.

Out of interest, which company have you moved to?

We stayed with DL for the contents insurance as they price matched. I haven't moved the car insurance yet as it's not up for renewal until the end of the month. The best price (and comparable terms) were from Elephant and Admiral who I think are the same company?

Yes Elephant and Admiral are the same, mainly based in Wales. From what I gather they generally have a good reputation. The main problem with these companies appears to be the use of Albany Assistance, if you had a claim. Lots of complaints about Albany. But this is not unique to Albany as other Insurers use Drive Assist and they also have a reputation for being difficult to deal with.