Insurers have effectively announced that customers who automatically renew their motor car insurance have no one to blame but themselves if they aren’t pleased with higher rates for the coming year, a strategy that seems strangely counter-intuitive when most other firms rely on customer loyalty for continued business. Insurance providers say that, unless a customer goes the extra mile to contact them directly about their new annual premium price, they bear no responsibility for consumer happiness.
One discount car insurance company representative said that a customer who enquires about their newer rates can sometimes elicit a more competitive quote from their provider, as insurers will review the specific circumstances of an individual driver, such as risk, how long they’ve been with the insurer, and their claims history. Ringing up your insurer also allows them to review your cover requirements, which can also occasionally result in altered premium pricing as well, the spokesperson added.
Making matters worse for consumers is the lack of power the Financial Services Authority holds to make any actual impact on premium levels. The FSA, which has regulatory power over insurance providers, effectively has no power to alter the behaviour of insurers in regards to the premiums they charge their customers.
Again this may seem counter-intuitive to consumers, especially since FSA regulations state that insurers are required to treat their customers fairly and provide them with the best possible service. Regardless of regulatory language, the watchdog simply has no power in regards to premium price levels.