Insurers to provide clearer renewal information
Consumers are to be given clearer information about their insurance premiums when their policy is up for renewal, under new proposals from the Association of British Insurers (ABI).
The ABI has written to the City watchdog, the Financial Conduct Authority, to outline plans that would see renewal documents include the premium customers paid last year and the new quote, making it easier for people to compare prices.
In many cases, this is not currently happening, leaving customers unaware that their premium may have increased.
Policy documents would also include a clear explanation of any introductory discounts that may have applied to new customers and which subsequently finished when the policy term expired.
Huw Evans, deputy director general of the ABI, said: “Our proposal, if adopted by the FCA across the market, would significantly improve transparency for millions of customers.”
In response, Which? executive director Richard Lloyd, said: “These simple changes could save people money by prompting them to shop around or haggle for a discount, and we urge the Financial Conduct Authority to adopt the proposals.”
The new rules, which will apply to motor and home and contents insurance, are expected to come into force by the end of 2015.
Does exactly what it says on the tin: covers the contents of your home for theft and damage and also may insure certain possessions (jewellery, cycles) outside of the home. Things to watch for include the excess and also the maximum payout on individual items. Another grey area is kitchen fittings, as some contents policies say these are not contents but part of the fabric of the property and covered by buildings insurance and some buildings policies don’t cover them because they regard them as contents.
Association of British Insurers
Established in 1985, the ABI is the trade body for UK insurance companies. It has more than 400 member companies that provide around 90% of domestic insurance services sold in the UK. The ABI speaks out on issues of common interest and acts as an advocate for high standards of customer service in the insurance industry. The ABI is funded by the subscriptions of member companies.