Although we are told that car insurance premiums are falling off the cliff – by more than 10 per cent over the past year – it’s not what I am hearing from the proverbial coalface.
Far from it. A number of insurance companies, it seems, continue to send out renewal notices with stratospheric premium increases in the hope that customers will pay them without batting an eyelid. Outrageous behaviour.
Many customers pay up for a number of reasons: trust in their insurer to always do the right thing by them, an inability to shop around (through fear of, or a lack of access to, the internet), forgetfulness or poor time management.
Other customers are savvier, either challenging their insurer to justify the increase, often resulting in a lower premium – or cancelling the renewal and using a comparison website to buy cheaper cover from elsewhere.
Among the savvy brigade is Danny Russell, a marketing consultant from Thames Ditton in Surrey. This time last year, I spoke to him about the 49 per cent increase that insurer Admiral wanted to apply at renewal to the multi-cover policy (home and motor) that he and wife Julia had with them. They live in a beautiful five-bedroom home and drive a Peugeot E-208.
Savvy: Marketing consultant Danny Russell wants others to follow his lead and challenge their insurer
Despite having made no claims since insuring with Admiral four years earlier, the insurer wanted to push up their premium from £617 to just over £921. Danny wasn’t having it and saved more than £170 by taking out alternative cover with Aviva (home) and Hastings Direct (car).
Last month, Danny and Julia, both in their 50s, received their renewal notices from Aviva and Hastings. Given they had made no claims and incurred no penalty points on their driving licences, they expected any premium increases to be minimal. Indeed, they half hoped that the cost of the covers might even fall.
Aviva were good guys, offering a premium 1.8 per cent higher than the year before – £433.08 instead of £425.28. The couple accepted immediately. A result.
But Hastings wanted to push up the price of their car cover by 64 per cent – from £324.45 to £532.63. Danny wasn’t having it and found identical car cover from Axa for £234.93 – £297.70 cheaper than Hastings’ renewal price and 28 per cent less than what he had paid 12 months earlier.
Given the cover with Hastings was set up to renew automatically, he rang to inform them that he wanted to cancel. After waiting nine minutes for his call to be answered, he was asked a series of questions which led to a new renewal price being offered: £324.07, or 38p cheaper than last year’s premium.
‘They should have offered the £324.07 price from the start,’ a dumbfounded Danny told me on Friday. ‘If they had, I would have accepted straight away.’
On Friday, Hastings said that Danny’s initial renewal premium was based on his policy details – which were then updated when he contacted them, resulting in a reduced premium.
Fair enough. But Danny still believes the current pricing (and sometimes repricing) of renewal premiums is discriminatory because it penalises the inert.
In many instances, they are vulnerable, elderly people who don’t use the internet. It’s unacceptable.
Paying by cash should be our right
The Payment Choice Alliance (PCA) does what it says on the tin.
It campaigns passionately for people to be given the right to choose how they pay for goods when out shopping, travelling on a bus, having a drink in a pub or at a football match.
That means cash or card, not just ‘card only’, as is increasingly the case.
The evidence it presents in support of payment choice is overwhelming. According to PCA chairman Ron Delnevo, 88 per cent of people believe the UK should not become cashless while 71 per cent want a law passed requiring retailers to accept cash payments. Businesses that frustratingly no longer take cash include posh baker Gail’s, coffee shop Ole & Steen and Italian restaurant chain Zizzi.
Last Thursday, the BBC reported that an 81-year-old football fan who bought a cup of tea at Plymouth Argyle’s Home Park stadium had the item taken off him (and thrown away) when he went to pay by cash. Like many football grounds, Home Park is cashless.
Card-only: Gail’s is among the firms that won’t accept cash
The fan, David Evans, said he felt discriminated against, a view shared by Martin Quinn of Campaign for Cash (CfC) who was interviewed on the issue. Delnevo says support from MPs for a law mandating retailers to offer cash as a payment choice is overwhelming. But Labour is not interested – as indeed previous Conservative governments weren’t.
Interestingly, Labour has chosen a cashless venue – the Arena and Convention Centre in Liverpool – to host its party conference later this month.
Payment choice should be a right. MPs think so, the PCA and CfC think so – most readers certainly do as well. The Government should not ignore them.
80 days to go until Budget…
We now have 80 long days to wait before the Chancellor of the Exchequer delivers her (late) Autumn Budget.
How tortuous.
Sadly, given the parlous state of the nation’s finances, there will be few of those
80 days when rumours of new tax rises in the pipeline will not bubble to the surface.
Over the past month, reports of possible tax attacks on buy-to-let income, pensions and our homes have all gone unchallenged by Treasury officials. As have likely curbs on the gifts that people make to reduce inheritance tax bills when they die.
In the weeks ahead, there will be no let-up as the Treasury explores a multitude of other ways to help plug a gaping £50 billion hole in the nation’s finances left by Labour’s reluctance to take an axe to public spending.
We will do all we can at Wealth in the next seven and a bit weeks to separate the wheat from all the chaff – thereby ensuring your savings and investments are in the best position possible to withstand whatever the Chancellor throws at them in November.
We only have your best financial interests at heart (if only Angela Rayner could say the same).
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