Tuesday, 20 August 2013

Insurance - Scam!

A large number of boaters will have insurance of one kind or another. Car, House, Contents, Boat are all some of the items that we will arrange insurance cover for. Some forms of insurance such as for your car are required by law. Others you can take a risk with. But you will be placing very valuable items at risk for a relatively trivial sum in the big picture. For a long time, I relied upon auto-renewal as a way of  making sure I did not forget to renew. I'm sure that none of us do not want to end up without cover. 

This year, I have been making an effort to shop around more for cover.  Because of the rising renewal costs. The thing is, I have been able to make significant savings in insurance cover. Now, I know that there is nothing free in this world. I always take care to match like for like or try to obtain better cover for a similar price.

Auto renewal, gives some peace of mind. However, we found that there was an expectation that we would ring the insurer to cancel the auto-cover if changing to another provider. Now, I don't mind picking up the phone and cancelling cover. However, what I do mind is waiting some considerable time for the call to be answered from my mobile. We found that the only way published to cancel was via the telephone. So I tried to cancel where possible via email. One insurer replied via email that I could only cancel by phone. This started me looking around at what can happen with auto-renewal policies. Those policies that are supposed to give us that peace of mind. 

The Financial Ombudsman Service has some horror stories to report. For instance people who have taken out insurance policies with new insurers. Who failed to realise their policy would automatically renew, leaving them doubly insured and out of pocket. More worryingly, there were instances where individuals believed that their insurance policy would renew automatically, only to discover later that they haven't leaving them uninsured. such as when found to be driving without insurance and stopped by the police or involved in an accident. For some people there were problems with making claims when an insurer says that the persons personal circumstances have changed.  The person concerned has failed to disclose the relevant changes before the policy was renewed. Such as a speeding convictions or a health problem for example.

There's also the fact that auto renewal prices frequently higher. I found that on the price comparison sites. My insurer would offer cheaper rates than was offered under the auto-renewal premium. I checked with one and they said they were only prepared to use the auto renewal price as the other price was for new business. It seems in the world of insurance loyalty to a company counts for nothing and certainly doesn't pay. The insurance market is a highly competitive one so it's always worth doing a quick shop around.

Terms and conditions apply both ways. If at the time of commencing a new policy you state that you do not want an auto-renewal policy. Then your insurer should honour the clause. If they refuse, take your business elsewhere. You have a 14-day ‘cooling off’ period following the start of a new policy or renewal of an existing one, during which time the insurer is legally bound to cancel it. If you realise the error within this period, then you should be able to cancel your policy.

If you feel you haven’t been treated fairly, then be sure to write a letter of complaint to your provider. Your provider should deal with any complaints within eight weeks. If you’re not satisfied you’ll then be able to refer it at no cost to the Financial Ombudsman Service who can act as an arbitrator. If the FOS does find in your favour, not only will you be exempt from paying any cancellation fees, but you should also be able to claim back any additional costs incurred as a result of the error, such as premiums that may have been withdrawn automatically from your account.

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