Insurers are using underhand tactics to raise insurance premiums even if policyholders don’t make a claim
Have you ever rang your insurer to make an innocent enquiry about a potential claim, but not made one? If you have answered yes the chances are your insurer will still hike your premium on renewal.
Just a simple enquiry about how much your excess is can set off alarm bells at your insurer and result in renewal premiums going up, even if you change insurers. Consumer groups have condemned this approach by UK car insurers as a “money grabbing” exercise and this could result in policyholders not seeking help and advice from their insurers.
The Financial Ombudsman Service (FOS) has received complaints off policyholders over this practice. The FOS deals with complaints by looking at the questions a policyholder is asked – for example, finding out whether the word ‘claim’ or ‘incident’ is used in the process.
Graeme Trudgill, of the British Insurance Brokers’ Association, says “the law requires policyholders to divulge relevant information. You have to notify your insurer, even about no-fault incidents. But many insurers won’t penalise you as they don’t want to lose your business but sometimes insurers mark down incidents as claims by mistake.”
Julie Daniels, head of motor cover at insurance comparison website comparethemarket, confirmed that the website hear of a number of complaints along these lines. Miss Daniels also confirmed drivers must share with their insurer details of any incident whether they are to blame or not. Even having a chipped windscreen fixed has the potential to increase your premium.
Lee Griffin, car insurance spokesman at comparison website Gocompare, says: “Some insurers will disregard such incidents and concentrate on actual claims. This is why it is important to compare quotes from a wide range of insurers, as your insurer may raise your premium at renewal for reporting an incident, but others won’t take this into consideration at all.”
James Daley, of consumer website Fairer Finance, says: “Being penalised for reporting an incident that does not result in a claim being made is not fair.”
Mr Daley continued: “It doesn’t instil trust in the industry when policyholders are too scared to contact them. All it does is encourage people to withhold even more information.”
Another way to look at this is the number of individuals and businesses who have minor bumps, but to avoid their premiums increasing pay for the damage themselves. Following research policyholders consider paying up to £1,000 out of their own pocket acceptable to avoid the loss of their no claims bonus and increased premiums.
Part of underwriting a policy is based on whether you have had any accidents or claims in the last three or five years. To ensure insurers have not put any incorrect information on your file, you are legally entitled to request to see any of your details recorded on the Claims and Underwriting Exchange website www.insurancedatabases.co.uk for a fee of £10.00.