Insurance pricing and renewals

When you take out or renew an insurance policy, the insurer will decide how much to charge you for it. The amount you pay for a policy is called the ‘premium’.  

Insurers consider a variety of factors when calculating the premium for the policy they’re offering. It can vary depending on the insurer, the individual circumstances of the policyholder and the particular risk(s) the insurer is being asked to cover. 

There’s no one ‘correct’ way for an insurer to assess the relevant risks involved with a policy, or to set the premium. In fact, an insurer might decide not to offer cover at all for a particular risk, which is their decision to make. There are many variables an insurer might consider when setting a premium – including its own commercial requirements.

We see complaints about insurance pricing at various stages in a customer’s journey with their insurer. Most complaints we see are due to an increase in price either at renewal, over a long period of time with the same insurer or following a particular event or change in the customer’s circumstances – which can sometimes happen mid-term (part way through the policy).

Below are some examples of the complaints we see:

• I think there’s been a mistake in calculating the price of the policy.
• I don’t feel like the insurer gave me clear enough information about the price of the policy so I didn’t understand the cost.
• I can’t change insurer for a particular reason and I’m unhappy with the price I’m paying.
• My premium has increased following a change in my circumstances, such as moving home or buying a new car.
• My premium at renewal has increased following a claim I made on the policy.
• I think I’ve been treated differently and have not been treated as fairly as other policyholders in a similar situation.
• I think my premiums have increased unfairly, without a proper explanation or justification.

It’s not for us to tell an insurer what price they should charge you for covering a particular risk, or how to assess and value that risk. We generally look at whether we think they’ve acted fairly and reasonably in the way they’ve set your premium, and whether they’ve communicated the price to you in a way that is clear, fair and not misleading.

There are aspects of the price we will look into further, depending on what’s relevant in a complaint:

• Discrimination – we’ll consider whether you have been treated fairly and consistently with the insurer’s general approach to pricing and whether it’s fair for the insurer to rely on the evidence or data they used to set the premium.
• Mid-term adjustment – we’ll look at whether the insurer has considered the outcome of a change part-way through a policy term fairly. 
• Misleading information – we’ll consider what the insurer told you and if it allowed you to make an informed decision about price.
• Mistakes – we’ll consider whether your premium has been calculated correctly, based on the information you provided (which must not be misrepresented), and whether the insurer’s general approach wouldn’t be appropriate in a specific case.
• Price increases over time – we’ll look to make sure the business has applied year-on-year price increases fairly, without taking advantage of you based on your lack of engagement or loyalty.
• Restricted choice – if you don’t have freedom to change insurers and choose what premium to pay, we’ll consider whether the insurer has treated you fairly.

If you’re unhappy with the price you’ve been quoted, we’d typically expect an insurer to provide evidence to show reasons for the price and any increases, and that the same criteria would have been applied consistently.

We may ask for some detailed information about how they priced your policy and a breakdown to explain the price – especially when the premiums have increased significantly, or substantially over time.

This information is usually confidential and so it’s likely we won’t be able to share with you exactly what we’ve been provided with. But we do expect insurers to provide this information to our service and can give reassurance that we’ve seen evidence to know whether you’ve been treated fairly.

If we’re satisfied the insurer has communicated clearly, fairly and in a way that isn’t misleading – and they’re able to explain and evidence  the price was reached fairly following their usual approach for all customers, we’re unlikely to ask the business to do anything to put things right.

Our service is free and easy to use. 

1. Before bringing your complaint to us, you should make a formal complaint to the company involved. If they don't send you a final response letter within eight weeks – or you're unhappy with their response – you can bring the complaint to us.
2. Fill in our complaint form. If you're considering using AI to help you complete the form, read our guidelines on using AIread our guidelines on using AI before you start. 
3. As you complete the form, we'll ask a few questions about some of the things we need to know to get started.
4. Your case will be assigned to a case handler who will get in touch when they start to investigate.
5. To help us consider a complaint fairly, we may ask you to provide more information to help us understand what happened

If we think your insurer has made a mistake or treated you unfairly, we’ll tell them to put things right. This usually means that they need to put you back into the position you'd have been in if the problem hadn't happened. 

We’ll also consider whether you’ve experienced any distress or inconvenience as a result of what the business did wrong and whether we think it’s appropriate to award compensation.

If you’re a business looking for information to help you resolve complaints or want to find out more technical information, you can find more detail about complaints about insurance pricing and renewals in the business section of our website.