Cynical tricks that stop safe drivers getting cheap car cover

CAREFUL drivers are paying £200 a year more for car cover because insurers are using dirty tricks to stop them getting no-claims discounts.

A Money Mail investigation has revealed how hundreds of thousands of motorists with unblemished records are being forced to jump through hoops if they want to benefit from a cheap deal.

Among a raft of sneaky tactics, we have discovered how insurers routinely:

FAIL to include evidence that a driver hasn’t made a claim when their insurance is renewed;

FORCE customers to call expensive phone numbers to get a discount;

ASK them to open an online account to obtain proof of their no claims;

PUT in place deadlines to prevent discounts being claimed;

BAFFLE customers with confusing rules about how good driving will be recorded.

Some obstacles drivers have to overcome are so restrictive that it prevents many from bothering to switch to a cheaper insurer.

Incredibly, a new industry database that stores drivers’ details allows insurers to check for no-claims discounts by computer — with no need for customers to supply the information.

Campaigners and consumer groups are accusing insurers of deliberately taking customers for a ride.

Heather Wheeler, Conservative chairman of the All-Party Parliamentary Group on Insurance and Financial Services, says: ‘We need greater transparency and an easier process at switching so motorists can get the best deal.

‘I believe there’s sharp practice going on; it should be easy, at renewal, for insurers to automatically send proof of no claims for customers to use.’

James Daley, of consumer group Fairer Finance, says: ‘The system is currently designed to trip up customers. It takes advantage of the fact that most of us lead busy lives, and don’t have the time to be chasing down letters from our previous insurance company.’

The no-claims discount tricks are the latest in a series exposed by Money Mail.

Insurers are involved in a fierce price war to get new customers. This has been caused by a boom in online comparison websites, which makes it easier to move to a cheaper deal.

To combat this, insurers try to hike costs for existing customers by an array of tricks.

In June, we revealed how a fifth of Britain’s 29.6million motorists stick with their current insurer every year — meaning they are being fleeced out of as much as £1.3billion.

Many don’t realise their premiums have been put up from one year to the next because nearly every insurer fails to put last year’s premium on renewal letters, a study by price comparison site Moneysupermarket showed.

The over-55s tend to be the hardest hit because they are often the most loyal and trusting customers. The average saving for all types of drivers who shop around for a cheaper deal is £208 a year, research for Money Mail by GoCompare shows.

Many drivers are growing wise to this tactic and switching regardless, so insurers are putting in place more restrictions.

But drivers who have a long track record of not making a claim are generally rewarded by insurers with cheaper deals. Three-quarters of motorists have some form of noclaims discount. By shopping around, someone who had not made a claim for five years could save at least £225, GoCompare found.

Every year your insurer is supposed to take into consideration your clean record. But not all of them include how many years you have not claimed for on your annual renewal letter.

It means you have to contact your existing insurer to ask what it is. You can then use this information to get a quote from a rival insurer.

They may promise a lower premium. But to actually qualify, you often have to send proof of your no-claims record. This is usually contained in a separate form showing your personal information and current insurer’s details.

A study by price comparison firm Moneysupermarket found only two out of seven major insurers — covering an estimated more than two million policies — include details of proof about a no-claims discount at renewal. In many cases, your insurer will ask you to dig out proof by logging on to an internet account. This often involves username details and passwords many customers will have mislaid or forgotten. Or you may find you have to call pricey 0844 phone numbers that can charge up to 30p a minute.

Motorists must also rely on their old insurer to swiftly send the requested no-claims documents. Insurers usually demand to see proof of this within 14 days — if it fails to arrive, your cheap deal will be cancelled.

David Jones, managing director at Moneysupermarket, says: ‘Many drivers are confused about transferring their no claims — and insurers don’t help.

‘Customers trying to get proof to give to a new insurer tell us they’re forced to call an expensive premium rate number during office hours — which can be hugely inconvenient. In some cases, the proof is only available in paper form, which means it has to be sent to the new insurer through the post, rather than electronically — more hassle. We want to see all insurers automatically provide customers with proof within the renewal letter, so people can easily switch and save money.’

In his summer Budget following the Conservative election victory, Chancellor George Osborne said the Government wanted insurers to do more to encourage customers to shop around at renewal time. City regulator, the Financial Conduct Authority, is to launch a consultation shortly.

A spokesman for the Association of British Insurers said: ‘Customers have several weeks to provide evidence of their no-claims history once their new cover has started.’