Insurance Renewal Negotiation - How Do You Avoid The "Loyalty Tax"

thwarted on 10/03/2020 - 16:41

Insurance renewal notice comes through and its more than last year (in real terms). What do you do to get a better deal? You can always source a new insurer, but this can be a time consuming hassle.

The approach I've used in the past with some success is a variation of the following.

"Hi, I just got my renewal notice and I see that its gone up $x from last year. I want to keep the same cover and excess, and I'd like to stay with you guys, so I'm calling to see if you can do better before I start looking around for an alternative."

Often they'll start explaining why its gone up, or why they are better than the others at which point I politely tell them that I understand all that but I'm still going to look around if they can't do better.

If I get a better offer on the phone I can accept and pay on the spot, or "agree" and ask them to send out a new notice.

Anything I've missed? or any alternative/better strategies?

Financial

Comments

  • oscargamer on 10/03/2020 - 16:47
    +4

    You need a number for them to match.

    Do a fresh quote for your car/house for the same company. Then do the same at two competitors.

    I just had house renewal come through for 1070. Did an online quote for the same company, came back with 830 ish. Rang them, they did it for the lower number. Other companies were similar.

    • thwarted on 10/03/2020 - 16:51

      Thanks, good idea. You'd expect them to be most competitive when giving a new quote

    • serpserpserp on 10/03/2020 - 18:27

      I think OP is talking about health insurance which is a different beast.

      • oscargamer on 10/03/2020 - 19:42

        I wouldn't know. They never mentioned which……….

    • whyisave on 10/03/2020 - 20:22

      Yes. I do this too.
      Get a new online quote, from the same insurer,
      and then ask them to match the lower price.

  • resubaehtgnolhcs on 10/03/2020 - 16:48
    +3

    YMMV …. but I have found this year, that trying to negotiate over the phone with current insurer was just too hard. Maybe they have too many claims from the fires, floods etc we have had already this year. I moved insurer and saved almost $1000 in the process.

  • Fergy1987 on 10/03/2020 - 16:49
    +3

    Last time I tried they said they could lower it with a higher excess and lower cover. I said no and they basically shrugged their shoulders at me. They dont care if you stay, They'll just replace you with someone else with a "New customers only" deal

    Sometimes you also get better quotes if you do it via the internet instead of the phone.

    • elgrande on 10/03/2020 - 16:52

      Yeh I had a take it or leave it attitude with Coles car insurance.

  • Almost Banned on 10/03/2020 - 16:59
    +1

    The best way to avoid the loyalty tax is to not be loyal.
    It always pays to shop it around.
    Several times I have obtained a new quote from my existing insurer and taken that as the best offer.

  • Porker on 10/03/2020 - 17:00
    +1

    When I have tried to negotiate a better price, my provider often gives excuses or tries to negotiate a compromised outcome (eg. lower price with higher excess).

    I've since realised I just get a better deal by applying for a new online quote with the same provider each year. I input the same parameters/details and the (I assume new customer) quote always comes out better than what I'm paying.

    I've asked them to price match their own deal to which they say 'they can't'. I've confirmed with them that there's nothing preventing me from cancelling my coverage and then re-apply with them with the better deal. Hassle indeed but I save in the end - a few minutes to save $80-$100 is fine by me.

  • Typical16-bitEnjoyer on 10/03/2020 - 17:00
    +1

    It is far, far easier to just churn to a different provider/retailer every 12 months, or sooner if promo deals pop up.

    Negotiating with your existing provider is too much work and 90% of providers don't genuinely give competitive retention offers. They just focus on "new" customer offers.

    I routinely churn between

    Car insurance - Woolworths and BudgetDirect
    Utilities - Tango and AGL
    House insurance - RACV and BudgetDirect

  • WreckTangle on 10/03/2020 - 17:49

    Wasted half an hour on phone to my large insurer starting with A who eventually decided they couldn’t match a competitor. Wouldn’t waste my time trying.

  • orangetrain on 10/03/2020 - 17:53
    +1

    Get a quote from them. You can call sales line and get someone quickly. Then ask them to apply to your account.

    Optional step: If they say no, then get angry.

    If they still say no. Shop around.

    I wouldn't suggest being angry but at some places, they're following a script that gives concessions to angry customers.

    • thwarted on 10/03/2020 - 18:19

      I like your thinking. Thanks

  • Donaldhump on 10/03/2020 - 17:54

    find 2 insurance companies you like and switch yearly if they dont match, they often so blind they cant see the pattern.

    same applies to health insurance and mistresses/toyboys

    • whyisave on 10/03/2020 - 20:24

      from last year, financial companies started sharing data on clients.
      so, they can now start to match/see who you switch between, what you are offered, etc.

      ( this is only if you did not opt out from this 'service', but in general,
      they have begun officially sharing clients' financial data between companies )

  • Ughhh on 10/03/2020 - 18:09

    You can always source a new insurer, but this can be a time consuming hassle.

    If you haven't put in the effort to get quotes and numbers from competitors, I wouldn't expect them to take your 'threat' seriously.

  • BertieBrown on 10/03/2020 - 18:21
    +1

    Be prepared to walk away.

    There’s no point in negotiating unless you have key thresholds that you’re willing to accept; a maximum premium you’ll accept from the insurer that you’re with. I would say at least two, to three other quotes from other insurers (that have identical terms; no point in comparing policies if they altering conditions for insurance, including things like excesses).

    When you have the amounts in hand, approach your insurer and get straight down to brass tacks; ‘I have a competitor’s offer via x source, particular to x insurer, whom will provide me with x coverage, with equivalent policy terms to yours, including identical rates of applicable excess (don’t say the other insurer has exactly the same terms as policies do differ necessarily in wording), for x payable premium at x rate (such as monthly, or upfront). I am contacting you as a courtesy, as I believe that as a long-term, loyal customer of your firm that you will see fit to reward my loyalty by undercutting your competitors offer, otherwise I will be leaving.’ Or a variation thereof.

    If the policies aren’t equivalent in terms, if they have different excesses, if one has accidental, or motor burn out etc etc then you’ll probably find that your insurer will just fob you off.

    In my opinion it is worth staying with an insurer who has provided cover for claims, but not drastically increased premiums, or denied cover, and may also have a significantly lower excess. I’m with RAA and they’re more expensive, but, they provided cover, and paid out claims, without cancelling, or increasing our premiums (comparative to terms of other insurers). If I’d gone with a different insurer, with an identical excess, I would be paying at least the same premium (and better the devil you know), and if I’d gone with an insurer who had a much higher excess I’m betting against the house in the event that something might happen, and that’s usually with an insurer that many people have issues with.

  • serpserpserp on 10/03/2020 - 18:28

    OP: Do you work for a corporation with employee benefits? If you do check to see if the provider they give you is cheaper.

  • onetwothreefour on 10/03/2020 - 18:28
    +1

    For the past few years I've had to cancel my home insurance with woolworths only to sign up with them again but through their website. Apparently the guys on the phone can't match their internet prices which is just stupid because they are the same company.

  • ESEMCE on 10/03/2020 - 19:20

    For house and contents we've been with Youi for many years.
    Each year at renewal time I've shopped around online but the Youi price has been cheapest or so dang close (ie less than $20) I can't be bothered switching.
    Can't say the same about their car insurance sadly. That skyrocketed!

Login or Join to leave a comment
Login Join