It’s not revelatory to say insurance renewal costs are a charge for apathy: if you don’t take the time and trouble to requote at renewal (see the car insurance and home insurance guides), you will almost always pay more.
In fact as many often discover, get a quote as a new customer from the company that provides your existing cover and it will often be cheaper.
One easy way to demonstrate this would be to oblige insurers to put the old cost next to the new when they send a renewal document (I wish I’d included it in the 50 words manifesto).
My sneaky insurance hike
Recently I got a renewal through on my private medical insurance policy. While I’m a believer in the NHS, timing and scheduling are crucial in my career, and if I suddenly need treatment, this is easier.
Intuitively I thought the price seemed to have jumped, and lazily, rather than searching for the paper work I called up (don’t worry it was part of my inclusive minutes) to ask what the premium was the prior year.
The jump was 12% – and that simple stat brought it home to me that printing the prior price would have two simple benefits.
- People would be shocked into ditch ‘n’ switch action
If you saw in black and white the increase, it should help make people realise they’re paying over the odds and get the impetus to change.
- Insurers would limit their rises
The publishing of last year’s figure would disadvantage insurers as they’d know if they push prices too high they’d lose, so it should act as an incentive to stay competitively priced.
In my case with PMI it’s sadly not as easy to ‘ditch and switch’, as new policies exclude pre-existing conditions; so it’s possible to lose out quite severely.
Even so as I haven’t made a claim in the last year, I was rather put out by the fact that the main justification for the cost increase was my age (jumping from 36 to 37). After all I’ve aged by 3%, but my policy costs are up 12%.
I told them that, and their counter was the ‘ongoing increase in medical technology’. There is some truth to that, but at current levels of inflation my thought is it’s simply the ongoing ‘premium rise’ profit technique of most insurers.
So I stuck to my guns and tried the haggling approach and after two days they got back to me offering a month’s free cover – which is effectively an 8% discount – bringing back some of the increase.