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How insurers may try to trap you:
A) Keeping you as a captive customer
Car insurance is a highly competitive business. Many insurers
offer substantial discounts to motorists who switch to them from
a competing company will once they have you as a client they
will most probably want to keep you for as long as possible, and
to sell you as many of their services as they can. A common
tactic is to get you to pay by credit card and then inform you
that "for your convenience" they will hold onto your card
details so that your next premium can be paid automatically
without you having to concern yourself with it. What they do not
tell you is that the renewal will be at full price and will not
include any introductory discounts that you have enjoyed in the
They are therefore hoping that you will simply shrug your shoulders when the renewal form arrives a year later, and that you will allow it to go through automatically, blissfully unaware that it is for a far higher premium than you paid a year previously. You should not fall for this; refusing to allow them to carry out an automatic renewal leaves you free to find a possibly cheaper alternative, whilst it does of course place the onus on you to make sure that you have a replacement ready for when your current policy expires.
B) Upselling you
Once you have got a policy for the first time you
may well get a call from an "adviser" at the
insurance company claiming to be checking that
everything is okay and you are happy with your
policy. You may then be offered an optional extra
such as legal cover or a guaranteed courtesy car in
the event of an accident; leaving aside the fact
that you thought you had already bought a courtesy
car entitlement (on many policies they only say they
will let you have one if one is available; that"s a
lot different from a guaranteed one!) It"s far too
expensive so you turn it down only to be given a
special offer at a fraction of the normal price.
Since it"s a bargain you accept – the following year, at renewal time, it is there on the policy again only this time at full price. The vast majority of insurance buyers never noticed this and since their policies are renewed automatically (see the paragraph above) the charge goes through without a challenge. This kind of thing used to be called "inertia selling" and was of doubtful legality but it"s now a quite widespread practice.
C) Dark arts
There is a much more dubious tactic that is not so
common but it pops up every now and again and it
could be financially devastating for the victims. It
is a condition of every insurance contract that the
proposer provides good honest information to the
insurance company about any factors which could
affect a premium or a decision on whether or not to
offer insurance at all. Now thanks to modern
technology and data sharing insurers can find out
far more about us than most of us realise; and it
should be possible for them to check up on many of
the more important questions that they ask on the
proposal forms, even before the forms have been
completed. Some of them do not do so.
They accept the premium and issue the policy but either make their checks afterwards and then demand a large extra premium if they find a discrepancy or, much worse, they wait until a claim has been made before checking the accuracy of the information they have been given, using any discrepancies as an excuse to delay, cut down or even refuse the claim. It is a fair comment to say that it is the responsibility of the person buying the insurance to make sure that all details given are 100% accurate but mistakes can happen and in this day and age it should be possible for at least the major ones to be discovered before a policy has been issued.
Don't be a victim
So, forget about the image we all used to have about insurers being elderly gentleman of the old school dressed in pinstripe suits and bowler hats. Today"s breed are sharp business people employing commission hungry salespeople who know every legal trick in the book. If you want to buy insurance at the lowest possible prices you need to be as sharp as they are and play them at their own game. Refuse to allow them to renew anything automatically, make sure that all the information you give them is absolutely accurate (it"s a waste of time trying to pull the wool over their eyes, they can find out the truth anyway), check every renewal notice carefully and always make sure you know what other alternative companies you can go to if your current one is no longer competitive.
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