Rant about charges for updates to car insurance policy

rob99

Direct line are good
When I changed my car a month ago changed policy details 3 times in 2 weeks private reg off change of car then then reg back on new car
No charge and new insurance certificate emailed within an hour if done during  business hours
all done online

Astaroth

So a couple of points covered there...

The contact centre are right, they plug your details into a black box and it tells them what the premium is. No insurer that I've seen has ever given them a breakdown of what elements are driving the pricing changes. One possibility however is that the full policy is being rerated based on todays rates rather than the rates when you bought the policy and so you effectively are getting an inflationary effect coming to play and in recent years due to changes in claims rules the Insurance Premium Index has typically been running much higher than normal RPI etc.

As to fees... you somewhat pick your insurer and pay the prices. Some work on the model of an ultra low initial premium and notable fees for changes whereas others work on a higher initial premium and less/no fees for changes. It isnt that different from the old British Airways -v- Ryan Air.

Cancellation fees is something I've written a prior paper on years ago, a lot ultimately comes down to the exceptionally high costs in marketing. "Cheap Car Insurance" can easily be costing an insurer over £20 per click and conversion from home page to buying a policy is tiny - 2% on the first visit and you're doing well.

A fully loaded cost per call is very hard to work out, whilst you'd argue that you take the average hourly rate and divide it by the average number of calls per hour handled the reality is more complex as you've got team leaders, auditors, office space, IT equipment, software licenses and whilst some of these are ok to split things like software and support staff are much more complex given the tools do more than just sales and service. As a heavily regulated industry insurance overheads are much more than say a mail order shop is.

If you were cynical, you'd probably notice the correlation between the credit card companies being told £25 is the most acceptable fee without further justification for missed payments/over limits etc and then other financial institutes adopting similar charges.

IronGiant

Similar to the charge for a letter from your bank isn't it?

Astaroth

Hence my saying...
A lot used to be more but most (banks, insurers etc) decided to drop them to this level - though technically the advice only applied to credit card companies and their costs for these things and it doesnt naturally follow that an investigation into some other FS process would result in the same findings.

un1eash

This, but still on a £400 policy to get £105 refund after 6 months. What's the bets my renewal won't be £200 for the year.

Astaroth

So you think you got too much of a refund?

un1eash

Is there such a thing as too much? Was simply surprised, expected any refund to be absorbed by there admin fees which are £25 in Admirals case.

273K

How do you find direct line compare price wise? I previously found them to be more expensive but will def consider them in future based on this.

rob99

When I got my renewal through from them it had jumped about £40 but I had got 3 points off a speeding ticket on my van last year
Fully comp with protected ncb and legal cover was about £275 the cheapest on the comparison sites was about £310

Astaroth

Insurers price based on their own risk appetites and experiences so who is cheap for one person isnt necessarily cheap for the next. For years Admiral were best for me but when I switched cars from a oldish VW EOS to brand new Merc SL they went from cheapest to an ok price whereas Aviva went from being very expensive to the cheapest.

Ultimately, shop around, check the aggregators and those that don't play on them. Know whats important to you (glass/key cover, driving other cars, european cover) and ensure you're comparing the ones that tick the boxes you need. Be careful with playing around with quotes as quickly you'll hit counter fraud tools that tend to load premiums if they think its fraud happening.