Exploiting loyalty shows lack of respect

ONE thing I didn’t mention in my piece opposite about car insurance renewal is that sometimes renewal premiums are higher with your existing companies because they are keeping their best rates for new business.

Many think it unfair that loyal customers should have to suffer, and be hundreds of pounds out of pocket in many cases, simply because insurers want to offer their best deals to new customers.

It’s right, of course, that insurers make their products as competitive as possible to attract new customers but they shouldn’t be doing this at the expense of customers who have been with them for years.

There is an argument that says we should shop around more, and of course it’s perhaps the case that insurers are preying on our lethargy as consumers, keeping prices high for customers who are not keen to look round the market every time that their policy comes due for renewal.

But there is a reason that some consumers don’t want to shop around, it’s not always because they can’t be bothered to make the time to look round the market. Sometimes it’s because they actually like the insurer they are using. Perhaps customers have a policy that covers exactly the things they have in their house, or gives good cover for sports equipment or musical instruments when the policyholder is travelling.

It might be that a particular insurer has a really good claims process and customers are happy knowing that when they have the misfortune to claim their claim will be resolved speedily and efficiently.

It’s all the more galling in a situation like this when these satisfied customers see their premiums shoot up every year while new customers come in and bag all of the discounts.

It’s even been reported that some customers are cancelling their existing polices at renewal and taking out a new policy with the same company just to qualify for a new customer discount.

That really shouldn’t be necessary and it sends out a really poor signal to consumers about the lack of respect that companies have for their business.