I bought a new car recently. I kept the old car for a few days while I decided how to get rid of it. Good grief, car insurance in the UK is a mess. Various cancellations, new contracts, payments and refunds – not to mention about eight different letters, and we’re finally sorted. This got me thinking about my ideal insurance company, and what I’d expect from it:
- Absolute clarity on premiums. Everything is rationalised and explained to the customer. Getting this car will cost you £x more. Driving an extra 5,000 miles per year will cost you £y. Probably need to work on a fixed profit margin, but you’re a business (maybe a co-operative?) and I accept that. Seems to work for the utility companies.
- Allow instant feedback, so the customer can make decisions. The car will cost £x more? Okay, I’m willing to accept that but I’ll keep my mileage down and take the train more often.
- No charges for changing details. Ever. It’s a penalty on the facts of life – worse, I’m willing to believe otherwise honest people are discouraged from keeping their records true and up-to-date because of this.
- On the same basis, and to keep those admin costs down: everything updated online (and, per point 1, the interactive estimator is online as well).
- Get rid of this stupid policy of rewarding new customers and screwing loyalty. I get a premium increase next year but Joe Bloggs joins and gets 10% off?
- Make it absolutely clear what effect No Claims Discount has on the price. Insurance companies in other countries have clear rules on what percentage discount is applied with NCDs. Ours are smoke and mirrors.
- Make the idea that “to get a good deal, you need to shop around” redundant. See point 5. Many people I know shop around each year to renegotiate their insurance. I’d rather not be in a position where this is necessary, and it shows how little importance companies seem to put on loyalty. Give me your best price first time, every time. Stop the rigmarole of phoning around every year.
- Remove the fear from claiming. I’m not sure how to tackle this but there is an implicit problem when people avoid claiming because they can’t be sure what effect it’ll have on their premiums. Even if you have protected NCD, can you be sure they won’t increase your premiums for the next few years (points 1 and 6 may help…). I dread to think how many people resolve their issues with cash rather than going the “proper” way, simply because of this fear and the associated hassle.
Case in point: To change my existing insurance was going to cost a lot more (20%+); to cancel then start a brand new policy (with the same company) turned out to be much less. I don’t care much for the whys and hows … this is a ridiculous, time-consuming and unpleasant way of doing business.