Consumer complains about misleading information provided during her policy renewal

Insurance Pricing Home insurance

Alysha complained she’d paid more than she should have for her home insurance over a number of years.

What happened

Alysha moved to a new house and purchased her home insurance through the bank she took the mortgage with. It was her first home and Alysha thought it made sense to do all the paperwork together.

Alysha renewed her policy each year without question and had never made a claim. She received her paperwork through the post and always noted the renewal invites said the policy offered excellent service with a very high claims pay out percentage.

After six years Alysha noticed the premium had increased considerably from when she first purchased the policy so decided to shop around. She went online and found a number of policies that met her needs, all considerably cheaper than what she was paying.

Alysha cancelled her insurance and complained that she’d been misled about the value of her insurance and she’d been overcharged. Unhappy with the outcome of her complaint, she contacted our service.

What we said

We asked Alysha’s insurer to provide us copies of her renewal invites for each year. We also asked it to explain why her price had increased as it had since she first took the policy out.

We looked at the renewal invites and agreed these were misleading. There was a lot of information about the number of claims made and how often these were accepted by the insurer and it said that it felt the service it offered was excellent because of this. The claims information wasn’t quite accurate and it didn’t accept as many claims as indicated. But it didn’t give any opinion on its price or whether this offered good value.

The insurer explained the price increased over time because it applied a new customer discount when Alysha first took out the policy, which it had then recouped over the years. Based on the available evidence, we didn’t think it had increased the price unfairly.

We felt the information in the renewal invites could have been more accurate on the claims information but we didn’t think Alysha had relied on this information, or lost out as a result.

The insurer didn’t make any promises about the price or value of the policy in their communication with Alysha, so we didn’t think it was likely she was misled on those important points.  And when the price of the policy increased beyond a point she was unhappy with she questioned it, despite the same claims information being provided in the renewal invite. So we were persuaded the misleading information didn’t prevent her from shopping around.

We didn’t think Alysha’s insurer need to do anything to put things right and we explained to Alysha why we didn’t uphold her complaint.