Wednesday 26 June 2019

Consumers are urged to pursue new deals with insurers

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Charlie Weston

Charlie Weston

The Consumers' Association of Ireland say customers are more likely to get a bad deal from insurers if they choose to automatically renew and not actively seek a new policy.

Dermott Jewell, head of the association, said companies make a fortune from customers opting to do nothing.

He added that dual-pricing - signing up new customers on artificially low premiums for the first year, then quoting hugely inflated premiums to renew policies - was anti-consumer as it punished loyalty.

It typically happens with motor insurance. The practice has been described as a sinister attempt to exploit customers and play on their inertia.

"It is an appalling practice. People should never automatically renew, especially when it comes to motor insurance, as they are likely to get a bad deal," Mr Jewell said.

"Insurers make a fortune out of you if you do nothing. You must check out other providers."

The advice to consumers is to seek out a good broker or do the footwork yourself in order to get a better deal.

Quotes

Motorists should not tell insurers from whom they are seeking new quotes or what they have been quoted from their existing insurers, as the quote would only be matched, not beaten, experts said.

Drivers are likely to find that an exercise such as this results in the existing insurer treating the motorist like a new customer and giving them a lower premium than the renewal quote.

Over the past few months, the Irish Central Bank has been repeatedly called on to ban dual-pricing of insurance policies.

Asked if it had any plans to clamp down on the practice, the Central Bank has said it had no role in relation to either pricing considerations or competitiveness.

Separately, one of the country's largest insurers has committed to ensuring their existing customers get the same premium rates as new clients in the UK, and end dual-pricing.

The move by Aviva in the UK will put pressure on home and motor insurers both there and in Ireland to follow suit.

Aviva Ireland says it already rewards loyalty for existing customers in Ireland, and offered lower prices than those quoted to new customers.

Irish Independent

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