The motorcycle insurance renewal scam is set to end
A new probe by the insurance industry regulator will lead to the practice of unfairly increased motorcycle insurance renewal premiums coming to an end.
The UK motor insurance industry has been put on notice by its regulator to expect a clamp down on firms who treat motorists, including bikers, unfairly at renewal.
There is a wide belief among motorists and now the Financial Conduct Authority (FCA) that insurers currently take advantage of buyer apathy at renewal to automatically charge a higher premium, often far higher than the motorist could achieve by shopping for new quotes.
In a letter to CEOs in the insurance industry, Andrew Bailey, the chief executive of the FCA, said the expectation was that firms must price policies fairly for their customers and that a report undertaken by the regulator had identified, “…issues regarding firms’ pricing practices that could cause significant harm and poor outcomes for consumers.”
In particular, the FCA warned insurers that it had found, “Firms failing to have appropriate and effective strategies, governance, control and oversight of their pricing practices and activities, such that they are unable to reliably assess and evidence whether they are treating their customers fairly.”
The regulators report also found, “Differential pricing leading to some identifiable groups of consumers paying significantly higher prices than other identifiable groups of consumers with similar risk and cost to serve characteristics.” This is a clear reference to motorist’s being charged more at renewal than they would expect to pay for a new policy.
Earlier in the year, the FCA warned insurers that they were repeatedly failing to implement new rules designed to ensure motorists have a clearer understanding of the difference in price between a previous premium and the renewal price, and that the policyholder should be encouraged to shop around to ensure the renewal price quoted was fair and competitive.
Get yourself sorted:
Biker & Bike has consistently encouraged bikers to get multiple insurance quotes at every renewal.