Beware The Insurance Lazy Tax!

Lpicklewizard on 21/02/2017 - 11:56
Last edited 08/03/2017 - 00:58 by 1 other user

I'm partly to blame here, and I am usually more aware of such things than most, but on this occasion, time got the better of me and I got burnt!

I just checked my bank balance to find a $909 debit which I didn't remember making. I quickly realised it was my car insurance renewal. 3PP only, 2 cars (one small hatch, one soft roader but turbo so instant death machine in the eyes of the insurer!)

I went to their site (I won't name names… but suffice to say their renewal process doesn't seem very Progressive) and used my current details, same drivers, same cars, same accident history and same usage. $506 for a 12 month policy.

That's a lazy tax of 80%. I've asked for a refund of the difference, if that doesn't work I'll be cancelling the policy, getting my refund and simply taking out a new policy for $400 less.

Anyway - this was just an off-my-chest rant that will hopefully serve as a warning to the rest of you - check your renewal before it renews!

See also: AAMI Insurance Cheats When Giving Quotes to Members Already with AAMI
(AAMI Insurance gives higher quotes for existing members who do a new quote with the same address.)

Automotive

Comments

    • picklewizard on 21/02/2017 - 12:48
      +8

      I'm not though…. I'm paying 38 per vehicle per month.

      A new customer with an identical policy would be paying $21 - the whole point is that I'm being charged an extra $17 per vehicle per month!

      Do you even know what forum you're on here? :P

      • ozbjunkie on 22/02/2017 - 22:48
        +1

        Please name and shame. This is not libelous it's just a fact.

        • mccaj09 on 23/02/2017 - 10:32
          +2

          im guessing its progressive

        • ozbjunkie on 24/02/2017 - 08:58

          @mccaj09:
          Cheers! I now see that clue with close reading… I didn't even know they were a company.

  • Mikinoz on 21/02/2017 - 12:23
    -3

    TLDR version?

    • picklewizard on 21/02/2017 - 12:50
      +6

      Auto-renewed policy: $909
      Equivalent policy as a new quote: $506

      Insurance company are ripping me off to the tune of an additional 80% for simply being an existing customer.

      (Seriously though the original was already short enough!)

      • Mikinoz on 21/02/2017 - 12:53

        Ouch! it was short but was more like a rant, the tlder version is good though :)

      • jimbobaus on 23/02/2017 - 03:17

        If you cancel most insurers wont let you re-join them for 60 days, this is to prevent you getting "new customer" offers
        Example AAMI, Budget Direct and Coles offer 20-30% off new policies for the first year for "new customers only"
        If you cancel and try and re sign up within 2 months you are NOT classified as a new customer and therefore wont be eligible, any attempt to buy the policy online will give you an error asking you to call them.

  • airzone on 21/02/2017 - 12:43
    +1

    TLDR: Never accept insurance renewal until you have been quoted a new policy.

  • buzymum20 on 21/02/2017 - 13:20
    +3

    Yep found this too, and asked them why the company didn't reward loyalty and they replied that it was common thing with insurance companies in order to drum up new business. They offered to knock $50 off my renewal, that was as low as they could go, and yes, I could choose to just take out a new policy and pay less. If I did that, would I please tell them? Yeah, sure..

    • picklewizard on 21/02/2017 - 13:57
      +1

      So they wouldn't even match THEIR OWN quote? Wow…

      Edit: Well whaddya know, I just got the same response…

      • chriise on 21/02/2017 - 18:08
        +1

        So can you take out a new policy with the same company?.. I'm just coming up to my 2nd year (first renewal) in aus, so not sure what best process is. UK renewals seemed simple enough.. just ring up and they match their new customer quote.

        • picklewizard on 22/02/2017 - 09:12

          Here's what they sent me:

          "You may purchase your new quote and cancel your current policy. Please note that if you choose to purchase your new quote, the price is only valid for that day and is subject to change. Once you've purchased your new policy, log in to your current policy and cancel the current term."

        • chriise on 23/02/2017 - 10:16

          @picklewizard: fair enough. shame they make you jump through these pointless hoops though.

  • ThithLord on 21/02/2017 - 14:56
    +1

    Thanks for posting this, OP. I just took out a new policy and saved about $250 a year.

    • picklewizard on 21/02/2017 - 14:58
      +1

      No worries! Anything to help beat these sharks!

      • ThithLord on 21/02/2017 - 14:58

        Correction - I enquired with my insurer why it was cheaper to take out a new policy, and they just reduced the amount.

  • MeesusEff on 21/02/2017 - 16:54

    A few weeks ago, I received an 'we tried to debit your account email' for one of my insurance (I dont put a lot of money in my ATM/cash out account so I keep track of my spending) and then they sent me the policy renewal, and I got hit by my bank for an unsuccessful money transfer. I was super annoyed, the 'pretty well known' insurance company didnt send me an email to advise me that my policy date was coming up. Yeah I suppose its something that I am meant to keep track of but a courtesy email would have been nice!

  • bluesky on 21/02/2017 - 18:53

    I am with RACV, and I find the opposite is true. In the last two years, the renewal cost is always better than a new quote with them. Not sure if that is because they know my policy is due for renewal, and they deliberately inflate the price of a new quote (they require all the car and personal info during a quote, so technically possible to match to their customer base). Or whether the pricing quote really applies to a new customer with those details, seeking a policy with them.

    So, in my case, there is an advantage to renew rather than re-price a policy. I can only save if I move to another company. I only stuck with them because I hear that they are good, where claims are concerned.

    • lainey13 on 21/02/2017 - 19:52
      +1

      Or look at it this way, RACV rewards you for staying with them. Also if you stay long enough to reach Silver etc you get bigger discounts.

    • PVA on 22/02/2017 - 22:55
      +1

      not for RACQ, cheaper to cancel and have a new policy each year.

  • furys12 on 22/02/2017 - 09:12

    one of the many reasons to not have anything set to auto pay and instead manage your finances manually and carefully

    i just checked both my car policies, got angry because the quote was $100 less then my recent renewal but then i realised i didn't add fire and theft, turns out i'm saving $40 over the current quote haha, thats with AAMI

    • picklewizard on 22/02/2017 - 09:16

      Yeah normally I'm super on top of these things but it got past me this time!

  • Masher84 on 22/02/2017 - 16:38

    We got a renewal from RACQ for a contents policy a couple of weeks ago. The most annoying part was not that the premium was nearly 40% higher than last year but that they had introduced a new charge for paying monthly. Previously, a monthly instalment was 1/12th of the premium; now it costs 25% more. And not one word about the extra cost in any of the guff that comes with the renewal info.

    Could not get them to explain/justify either the premium increase or the new instalment charge so cancelled the policy and got a replacement from one of their competitors for a little bit more than last year.

    So, just to picklewizard’s Beware the Lazy Tax, I’d add Beware the Instalment Premium.

    • PVA on 22/02/2017 - 22:59

      i was with racq for contents a few years ago until premiums went super high.
      Ended up with Coles and they have been great, even did a claim when our dishwasher burst a hose a flooded downstairs. easy to deal with, quick with claims and finalising. I was impressed as I thought maybe a cheapy policy would be hard to claim.
      Next premium was similar price didnt really go up enough that I noticed.

  • HeWhoKnows on 22/02/2017 - 22:01
    -2

    Always do a comparison on comparethemarket.com.au

    • picklewizard on 23/02/2017 - 12:04

      Last time I tried these guys, their 'cheapest' quote was several hundred more than the cheapest I could find (without looking hard!)

      0/10 would not use again

      • HeWhoKnows on 26/02/2017 - 10:16
        -1

        This is only a comparison at a basic level since insurers can offer many options. Depends what you plug in and the variables you select. When you go to insurer's web site they ask more questions and give more options so your quote can change dramatically from the original quote. eg Maximum No claim bonus protection or hire car. A tip would be to ensure you plug in as much information as possible - especially the level of excess you require. I find it never differs very much from the quote in comparethemarket.com.au. Has saved me hundreds every time I use them

    • [Deactivated] on 23/02/2017 - 20:19

      Here?

  • Masher84 on 23/02/2017 - 09:23

    Out of 18 insurers I checked, 10 (incl. Coles) don’t offer cover in our part of the world – FNQ. It seems that the possibility of a cyclone is too hard for them to cope with.

    We only have this insurance for off-site public liability cover so have the minimum sum insured and highest excess. (Just too exy for full cover so we effectively self-insure).

  • [Deactivated] on 26/02/2017 - 20:20

    Insurance companies not matter who are all the same.

    They are in the used car sales men, dentists, contractors barrel if you ask me.

  • anonymous01 on 07/03/2017 - 09:41
    +2
    Merged from AAMI Insurance Cheats When Giving Quotes to Members Already with AAMI

    Hello OZB members, I've just discovered something about AAMI Insurance. I am currently paying $120 per month for my car insurance ($800 Excess), and thought it was a bit expensive. I thought I will try and get a re-quote from their website, put in all my details (Did not include any extra options, chose same excess etc.), and got a quote for $127. Any other person would stop at this point and think better not to change my policy. I am paying less than their current quote.

    Then I checked RACV and got a quote for $95 for same car and model, and even lower excess of $650.

    Now the back of my brain was ticking and telling me something is not right. I went onto AAMI website again, put in same details again, but for my street address, I put my next door neighbors address… and wallah.. the new quote was $77! Everything exactly the same, except it was next door. Highly unlikely, but may be because my house is on the corner of the street, may be that may have affected the cost? Right?. sure let's try it again, I fill in the same details again, also put my OWN address, but for my birth date, I change the month to make it 2 months younger than me. and wallah!! new quote is $77 again! So in my opinion, I strongly believe when you are checking quotes online, AAMI checks against their current members database and matches information (birth date, address, car type?) and gives them higher quote than they are currently paying to make them not complain or change. I will be changing my insurance to RACV today, if this is how AAMI does their business. May be I am just being paranoid.. but evidence seems too strong. I would love to hear your opinions or let me know if I am wrong. May be you guys can compare your quotes online by changing address or birth date.

    TL;DR: When you are checking car insurance quotes online, AAMI checks against their current members database and matches information (birth date, address) and gives them higher quote than they are currently paying to make them not complain or change, but if you change your birth date or address by one house, quote is much lower.

    • anonymous01 on 07/03/2017 - 09:52

      Seems like people are already aware of this:

      "Would be fun to see if they pick up on it and try to charge you higher than the generated amount.

      They do – if you have an existing policy and try to do a new online quote for the same thing, you'll get a higher premium. If you put in your address as one house either side of where you actually are, with everything else the same, the premium will go down (unless your neighbours also happen to be AAMI policyholders).

      I'm not sure whether or not that new quote premium is the same as your renewal premium though."

      http://forums.whirlpool.net.au/archive/2492852

    • [Deactivated] on 07/03/2017 - 09:59
      +1

      When I did it last, I put in fake details and quote was about $50 less annually than with true details. It was $150 less than a phone quote. I am existing customer.

    • Evil-Elmo on 07/03/2017 - 10:04

      I used to be with AAMI. I did the same thing but my online quote actually came back quite a bit less than what they'd offered me to renew. As far as I'm aware my details were the same. Despite having been with AAMI for many years, I decided to change to another insurance provider who was quite a bit cheaper.

    • k-rokfm on 07/03/2017 - 10:05
      +2

      Call up and see if they can do any better then. If not then change. Do you even ozbargain?

      • Evil-Elmo on 07/03/2017 - 10:22
        +1

        I called them last time I got a better price from another provider. They reduced the premium a little bit, but not significantly (not down to the other quote). In that case I didn't want to go with the other provider so I accepted it.

        I don't think I should have to call up every single time I renew if they want to retain my business. Maybe if they matched the last quote, but they didn't. So I voted with my feet instead (I think I'd been with them about 8 years).

    • Belgarath on 07/03/2017 - 10:10
      +3

      Was with AAMI for 13 years. Shopped around when adding another car to the policy. When discussed with AAMI that the quotes I had received were $150 less per month then theirs, they told me to go to the competitor. They aren't interested in retaining customers. Why is beyond me as it costs more to find a new customer than it does to retain one.

      They did say they work on the basis that people wont ever call to renegotiate insurance.

    • inherentchoice on 07/03/2017 - 10:29
      -2

      Glad I am self insured. That way I don't have to pay for other people's misfortunes and a bunch of overpaid middle men to facilitate the process.

      I think it's a bargain personally.

    • benderz on 07/03/2017 - 10:37

      My auto renewal last year was $150 more than if I went to their website and chose new customer. It turned me off, but they were still cheaper than comparable options.

      I called to query the price difference and was told something along the lines that I was a valued member and was getting extra benefits. However these extra benefits were nonsense and was a way to charge extra. I would have gone online insurance if any were reputable options.

    • chriise on 07/03/2017 - 11:01
      +2

      Your post has merged, but i feel this additional detail is important and may now be missed by others. I have renewal with AAMI coming up this month and you may have saved me a few bob with this info - thanks pal

      • anonymous01 on 07/03/2017 - 11:39
        +1

        No problem. Yeah I feel the same. I will ask the mods if they can restore this merging.

        • chriise on 07/03/2017 - 11:50
          +1

          i just changed mine to the unit next door. exactly the same, same secure car park. it was 23% cheaper than my renewal quote, and even 14% cheaper than my online quote. (my online quote was my renewal quote -$100, which i assume is the online discount).

        • chriise on 08/03/2017 - 00:32

          Also found that setting my previous insurer to Budget Direct knocked another $100 off. For seemingly no reason at all. Did you have any luck calling them at renewal to question these differences?

    • bluesky on 07/03/2017 - 15:22

      I suspect RACV does exactly the same, after 2 years of re-quoting and getting higher quote each time, than a renewal quote. And other insurers are always lower. See my comment.

Login or Join to leave a comment
Login Join