Consumer complains about price increase over time and misleading information at renewal

Insurance Pricing Motor Insurance

Qasim’s son made a complaint on behalf of his father about the price increase of his home insurance policy.

What happened

Qasim’s son was concerned his father had been treated unfairly with how his home insurance had been calculated. His father had been with the same insurer for 15 years and never made a claim.

Qasim’s renewal documents had been sent each year by post and had always been received. The policy renewed each year automatically with no contact or engagement from Qasim.

The renewal documents explained Qasim received several discounts for not making any claims but other polices were available. However, as Qasim’s circumstances hadn’t changed, he didn’t need to do anything as the policy would renew automatically. Qasim’s son said his father trusted he was getting a good price as a loyal customer.

Qasim’s son complained to the insurer, and after receiving its final response, he was unhappy with the outcome and contacted our service to make a complaint.

What we said

We felt the information in the renewal notices was misleading. The discounts applied were not substantiated and the promise of these could have been a barrier to Qasim shopping around or feeling the need to.

The insurer argued that clearer wording in the renewal wouldn’t have made a difference as Qasim was ‘inert’ and so wouldn’t have engaged with the price regardless. However, we still didn’t think the insurer had treated him fairly as increases had been applied that couldn’t be justified.

We thought it was clear Qasim wasn’t engaging with the cost of his insurance and we asked the business to explain why the price had increased over the years.

It was able to explain that a new business discount was received when the policy was first taken out. It increased the cost of the policy over the first five years to recoup this discount. It was unable to explain why the cost continued to increase as it did and couldn’t prove this was in line with its changing view of the risk. So, we didn’t think these increases were fair.

We felt Qasim had been left vulnerable and was treated unfairly. We felt by the fourth renewal and Qasim’s fifth policy it should have been clear he wasn’t engaging with his insurance. This was also the point from when the insurer was unable to explain why the subsequent increases had been applied.

We asked the insurer to refund the difference in premiums with interest added from when we felt the increases were unfair. So, from the fifth year onwards.