More insurance issues... mid term changes / charges?
Discussion
Just to set the scene, last year i had a sheddy 2007 Volvo V50 which Tesco insurers for £180. Four months in, I changed to a sheddy 2009 Volvo V50... same model, engine, value... and Tesco immediately said it'd be an extra £170 to cover it till policy end. I swore, paid it as cancelling was dearer. Renewal has not long come in at £175.
Said 2009 Volvo V50 has now gone to my sister to replace her 2010 Volvo V50. Again, nigh on identical cars aside for the colour. The RAC were taking £350 a year off her but 7 weeks into her policy, changing cars has seen it shoot up to £610. Looking at new quotes for the "new" car and it's around £360.
I'm not a huge fan of how insurers operate, seems a bit of a shady industry at times but this stings a bit... but yes, suck it up etc however I've never known mid term changes, especially for nigh on identical cars, to be so massively increased. Pretty much doubling the original polices to change yet quoting figures around the original price come the next renewal.
What's the solution to this? Are there certain providers who don't take the piss to this extent... or charge high cancellation fees? Not a rant as such and I know insurance prices went a bit nuts of late, however it now feels like once your in... they'll absolutely fleece you if you need to change mid term. I don't recollect it being this significant previously.
Said 2009 Volvo V50 has now gone to my sister to replace her 2010 Volvo V50. Again, nigh on identical cars aside for the colour. The RAC were taking £350 a year off her but 7 weeks into her policy, changing cars has seen it shoot up to £610. Looking at new quotes for the "new" car and it's around £360.
I'm not a huge fan of how insurers operate, seems a bit of a shady industry at times but this stings a bit... but yes, suck it up etc however I've never known mid term changes, especially for nigh on identical cars, to be so massively increased. Pretty much doubling the original polices to change yet quoting figures around the original price come the next renewal.
What's the solution to this? Are there certain providers who don't take the piss to this extent... or charge high cancellation fees? Not a rant as such and I know insurance prices went a bit nuts of late, however it now feels like once your in... they'll absolutely fleece you if you need to change mid term. I don't recollect it being this significant previously.
I started working in General Insurance in 1977 and it was always very sensible. You didn't pay for protected NCD once you had earned it and windscreen claims were free. Mid-term cancellations were refunded on a pro-rata basis if you had no claims.
By the time I left that industry in 2010 everything was getting silly, and it has only got worse.
I made a claim against the insurer of the car that hit mine in the rear at a set of lights in 2023, declared it to my insurer in 2024 and despite not costing them a penny they added about £40 to the renewal premium and increased the excess. I went elsewhere the next year.
It's all just a piss-take now. They impose those cancellation fees so they can charge silly premiums for a like for like replacement as you've discovered.
I only buy it because I have to.
By the time I left that industry in 2010 everything was getting silly, and it has only got worse.
I made a claim against the insurer of the car that hit mine in the rear at a set of lights in 2023, declared it to my insurer in 2024 and despite not costing them a penny they added about £40 to the renewal premium and increased the excess. I went elsewhere the next year.
It's all just a piss-take now. They impose those cancellation fees so they can charge silly premiums for a like for like replacement as you've discovered.
I only buy it because I have to.
Insurers will take the Michael with mid-term changes because you are a captive customer. Many of these changes will be bumped up by the admin fee of £25 to £50.
So what options do you have? if you are a new driver/trying to build up your no-claims then you have to suck it up.
If you've had max no-claims, then you need to calculate if it pays to cancel the policy and take out a new one - you might lose a theoretical year of no-claims, but if you have 30 years then what's the problem? You need to factor the cancellation fee, pro-rata refund/charge, but if they want say £700 extra, then it will be worthwhile.
I've been in this situation before and I make a mental note to f
k the insurer off at renewal time.
So what options do you have? if you are a new driver/trying to build up your no-claims then you have to suck it up.
If you've had max no-claims, then you need to calculate if it pays to cancel the policy and take out a new one - you might lose a theoretical year of no-claims, but if you have 30 years then what's the problem? You need to factor the cancellation fee, pro-rata refund/charge, but if they want say £700 extra, then it will be worthwhile.
I've been in this situation before and I make a mental note to f
k the insurer off at renewal time.Davie said:
...i had a sheddy 2007 Volvo V50 which Tesco insurers for £180. Four months in, I changed to a sheddy 2009 Volvo V50... and Tesco immediately said it'd be an extra £170 to cover it till policy end.
So could you not just cancel the first policy, pay the cancellation fee and start a new policy from a price comparison website? I assume that insurers are contractually (legally?) obliged to refund you pro-rata, (but obviously can charge admin fees)?LV did this to daughter when she switched to an EV three months into the policy - she'd paid £450 on her Ateca and they took £600 more to change to a Kona. Next renewal Kona was £550.
I don't know what the refund would have been if she'd cancelled but she's far too busy to bother herself with doing that, which I suppose is what they rely on.
I don't know what the refund would have been if she'd cancelled but she's far too busy to bother herself with doing that, which I suppose is what they rely on.
I know many will say they're too busy, but I read the T&C on insurance quotes now before taking out cover. There are usually links on comparison sites. I got whacked for a ludicrous charge for changing cars once so always do this now. As mentioned above, some companies do still do it all pro-rata but not not many.
The cancellation charge has to be 'reasonable' but isn't defined in law, and they all do it. Some insurance companies hide the arrangement fee (which isn't refundable if you cancel) by giving you a 'discount.' Classic car cover policies are favourites for this because of owner's likelihood of cancelling in the winter.
The cancellation charge has to be 'reasonable' but isn't defined in law, and they all do it. Some insurance companies hide the arrangement fee (which isn't refundable if you cancel) by giving you a 'discount.' Classic car cover policies are favourites for this because of owner's likelihood of cancelling in the winter.
The dragon is getting a new car next week , get online put all the details in and up comes a message that they can’t offer a quote to change , albeit it’s the latest model of the same car.
Go compare come up with a new quote of £750 for 12 months with a certain insurance company.
Try another well known comparison site , £550 for an identical policy with exactly the same insurance company.
Work that one out , the mind boggles.
Go compare come up with a new quote of £750 for 12 months with a certain insurance company.
Try another well known comparison site , £550 for an identical policy with exactly the same insurance company.
Work that one out , the mind boggles.
Mrs Legs car is insured with Aviva - recently changed the reg and did it on line through the customer portal.
In the past with other companies it’s cost £25 ‘admin’ fee.
Aviva cost was £0, so a pleasant surprise.
Compare that to one of the insurers she used previously- renewal notice came through that was £300 more than the next on line quote. Policy was set to automatically renew so she had to phone to stop that happening.
They took it as she was cancelling her policy (with 10 days left to run), when she clearly said she just wasn’t renewing the policy, and they charged her £50.
Took a few emails and phone calls to finally get them to understand the difference between cancelling and not renewing..
In the past with other companies it’s cost £25 ‘admin’ fee.
Aviva cost was £0, so a pleasant surprise.
Compare that to one of the insurers she used previously- renewal notice came through that was £300 more than the next on line quote. Policy was set to automatically renew so she had to phone to stop that happening.
They took it as she was cancelling her policy (with 10 days left to run), when she clearly said she just wasn’t renewing the policy, and they charged her £50.
Took a few emails and phone calls to finally get them to understand the difference between cancelling and not renewing..
Davie said:
Just to set the scene, last year i had a sheddy 2007 Volvo V50 which Tesco insurers for £180.
Seriously, how do people think car insurers can make any money charging daft premiums like this. That's £160 to Tesco, if you take off the tax. Out of that they have to pay the costs of running the tech to provide the quote, staff, premises, light and heat, re-insurance costs, the £30 MIB levy, etc etc. I'd be surprised if they have more than £50 left to allocate to claims costs. And this is providing £50m of tp property damage, plus unlimited tp injury cover, for 50p a day. Not to mention the cover for your own damage. I've said it so often on here, insurance for most people in the UK is so stupidly cheap, we've lost all sense of perspective. One of the ways they can complete in the race to the bottom that UK insurance has become (driven by punters who care about nothing other than initial price) is to make money on mid term changes. Without those, there wouldn't be any £180 premiums for Volvo V50s in the first place.
Most people don't make mid term changes. In any given year, most people will change nothing on their insurance, so they get the full benefit from the crazy pricing.
Edited by TwigtheWonderkid on Wednesday 25th February 09:46
Davie said:
What's the solution to this? Are there certain providers who don't take the piss to this extent... or charge high cancellation fees? Not a rant as such and I know insurance prices went a bit nuts of late, however it now feels like once your in... they'll absolutely fleece you if you need to change mid term. I don't recollect it being this significant previously.
I've never changed for such a similar spec car, but the last few times I have changed a vehicle mid-term my insurer (senior ship employee based) has always offered a pretty reasonable quote, certainly nothing like yours (and the last one was a car pretty much triple the value of the one it was replacing, cost about £85 about six months in I think, some of which was admin fee).As above, the whole industry is engaged in a race to the bottom in terms of customer service, driven by customers who are only interested in the headline price.
If the actual mean risk assessment of a policy is, say, £300 a year, an insurer will get far more customers by charging £250 a year and making up the extra £50 they need per customer by charging a few people through the nose if they need to change their contract than they would if they set their price at £300 in the first place.
It's hard to blame the insurers; they're ultimately doing what a hugely competitive market demands. So few people are willing to pay more up-front that it's probably no longer even worth them offering the policies, much of the time.
If the actual mean risk assessment of a policy is, say, £300 a year, an insurer will get far more customers by charging £250 a year and making up the extra £50 they need per customer by charging a few people through the nose if they need to change their contract than they would if they set their price at £300 in the first place.
It's hard to blame the insurers; they're ultimately doing what a hugely competitive market demands. So few people are willing to pay more up-front that it's probably no longer even worth them offering the policies, much of the time.
Edited by kambites on Wednesday 25th February 10:01
Buster73 said:
TwigtheWonderkid said:
(driven by punters who care about nothing other than initial price)
Further to my previous post of insurance at £550 the dearest quote was £2500 for identical cover , which one would you have chosen ?I paid £424 this year. Cheapest quote was £375.
Edited by TwigtheWonderkid on Wednesday 25th February 10:04
kambites said:
As above, the whole industry is engaged in a race to the bottom in terms of customer service, driven by customers who are only interested in the headline price.
If the actual mean risk assessment of a policy is, say, £300 a year, an insurer will get far more customers by charging £250 a year and making up the extra £50 they need per customer by charging a few people through the nose if they need to change their contract than they would if they set their price at £300 in the first place.
It's hard to blame the insurers; they're ultimately doing what a hugely competitive market demands.
Exactly. We get the press, the politicians and the insurance industry we deserve. If the actual mean risk assessment of a policy is, say, £300 a year, an insurer will get far more customers by charging £250 a year and making up the extra £50 they need per customer by charging a few people through the nose if they need to change their contract than they would if they set their price at £300 in the first place.
It's hard to blame the insurers; they're ultimately doing what a hugely competitive market demands.
Mid term changes cost usually because the replacement car is showing by the Insurers actuarial tables as necessitating a higher premium.
Sometimes it works the other way.
Admin charges for such a mid term change add to the annoyance and these have to be shown in the t and c.
The mid term changes are calculated at pro rata of the annual premium or at least certainly should be.
In the bad old days it uses to be that cancellations were sometimes calculated at short rate which is certainly penal for the customer - I know not whether or not this practice has been outlawed.
Motor insurance in the UK is largely all driven by market share and equally all underwriting is done by reference to actuarial data coupled to a degree of computer aided modelling.
Specialist and HNW Insurers work slightly differently.
The market is cyclical in nature so after a few good years ( very few and usually about 2 or 3 ) rates then reduce and conversely increase after a few poor years.
Over any given cycle or period of time any Insurer making more than a 10% net profit is considered to be doing really well !
Sometimes it works the other way.
Admin charges for such a mid term change add to the annoyance and these have to be shown in the t and c.
The mid term changes are calculated at pro rata of the annual premium or at least certainly should be.
In the bad old days it uses to be that cancellations were sometimes calculated at short rate which is certainly penal for the customer - I know not whether or not this practice has been outlawed.
Motor insurance in the UK is largely all driven by market share and equally all underwriting is done by reference to actuarial data coupled to a degree of computer aided modelling.
Specialist and HNW Insurers work slightly differently.
The market is cyclical in nature so after a few good years ( very few and usually about 2 or 3 ) rates then reduce and conversely increase after a few poor years.
Over any given cycle or period of time any Insurer making more than a 10% net profit is considered to be doing really well !
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