AA rip off beware of making mid term adjustments or cancellation terms.

Usually get a fair deal with motor insurance, but felt rcent experience with the AA has put me off them for life.

Insured a 2012 TDM fully comp as an additon to the garage, so zero NCB and £113 was a good deal considering the £250 excess and that AXA was the insurer.

After a couple of months had the offer of another bike that I have had an eye on for a while and insured it elsewhere then sold the TDM.

My faithfull Enfield Himalyan is a much lower insuramce group and lower value, yet AA wanted £157 to cover it for the 10 months to end of policy, of which £30 was admin fee. When I contacted them for a new quote for the Himi and TDM, guess what, the Enfeild was £78 and the TDM £121 with the same underwriter and terms etc. The maths simply does not work out and the advisor I spoke to could offer no explanation and refused to connect me to someone who could do so.

If I cancel the TDM policy there is no refund due to a £50 admin fee I think 12% insurance premium tax deduction and a £25 claw back from the price comparison site (which only saved about £8 over going direct to AA). This is in the small print, but I was not expecting to sell the TDM and if I did, had no expectation that AA would rip me off to the extent where cancellation was in fact more cost effective.

Seems they don't want the business, they can keep it.

Eventually got the replacement bike and Enfield covered for less than what AA quoted for just one of them.

There is a change in the law iminently to the effect that insurers cannot charge more for cover mid term than on renewal, but not sure of the specifics of this and any caveats so to speak.

Keep,ypur wits about you folks.

Car and home insurers are to be banned from charging existing customers more at renewal than they would expect to pay when taking out a new policy with the same firm, as part of a ‘loyalty penalty’ crackdown. The financial regulator estimates the shake-up will save £4.2 billion over 10 years.

Currently, many insurers hike renewal prices for existing customers in a process known as “price-walking”. This means you have to switch to avoid paying more for being loyal. In 2018, 6 million policyholders could have saved a combined £1.2 billion had they paid the average price for their actual risk, according to the Financial Conduct Authority (FCA). It also found some firms target the best deals at customers they think will not switch.

But under new rules from the FCA, which take force from 1 January 2022, insurers must:

Offer renewing customers the same price as new customers. So you shouldn't pay any more when renewing than someone with a similar risk profile who's taking out a new policy. Importantly though, renewing customers only have to be offered the same price as new customers who use the same 'channel', such as a comparison site. So if you took out a policy via a comparison site, when you renew the insurer should treat you the same as someone taking out a new policy via that same comparison site.

What this means is that the price for new and existing customers who come via one comparison site may differ to the price for those who come via another comparison site - what's key is the route you use to take out a policy. Price hikes at renewal will continue to be allowed so long as they're reflected in new prices too.

Factor any monetary incentives for new customers into the renewal price they offer. This means vouchers or gift cards offered to new customers by insurers will need to be offered to existing customers at the point of renewal. But the rule doesn't extend to non-monetary incentives, such as cuddly toys, which can still be offered to new customers only.

If a comparison site offers new customers a monetary incentive which is funded by the insurer, this must be factored in when calculating a fair renewal price. But if a comparison site chooses to offer a gift card or voucher which it funds itself, insurers don't have to factor this in - so it's likely we could see some competition here in future, with comparison sites potentially funding monetary incentives to attract new customers.

Not establish sub-brands in order to increase prices for existing customers. Similarly, insurers should not transfer existing customers to other entities within a group, or sell existing customers a product that is only superficially different from the customer’s current product with the sole aim of increasing the price.

Theoretically, firms could set-up sub-brands to sell at cheaper prices to new customers, but as soon as customers start renewing the insurer must offer renewal prices that are no higher than for new customers. The FCA adds that it will monitor firms’ implementation of its rules to ensure customers are treated fairly.

Report data on their pricing practices to the FCA. This is to ensure the rules are being followed.

Thanks wapping, plan to do battle with the AA after 1st Jan to transfer policy to another bike whose insurance expires soon. Hopefully I will be able to get a "fair" deal out of them.
Then next year tell them politely to sling it and go elsewhere, it was their shocking refusal to even explain the maths that finalised the decision for me.

Most other brokers would treat you much the same, so singling AA out is pretty pointless.

Whilst Bemoto might not have charged the admin fees, they will still have the taper on a refund rather than doing it pro-rata.

As for Wapping's comments, yes, I'm sure we will see lots of smoke and mirrors to manipulate the figures to give the impression of parity between renewals and new sales. Ardonagh, the owner of Carole Nash already plays the game on comparison sites with several sub-brands. The comparison site kickback in the form of gift cards is already played in the broadband market and used to be in the energy market, presumably to get around the regulator's fair competition rules. I wonder if the FCA has a proper grip on the arrangements between the mongoose, the opera singer and insurers.

Fair comment, but I do not agree that most insurers would treat me in a similar manner. . I have changed bike mid term quite a bit over the years and never ever experienced this level of disproportionate premium. Remove the admin fee and still nearly double a new policy annual ptremium for the remaing 10 months on cover, worth singing out the AA for this I think.

I was with the AA for bike and car insurance and for several years they were very good both at renewal and mid term change

Then I bought the Streetfighter

I was 4 months into the policy on the multistrada for which I was paying £240 per year

Told them of the change of bike and then sat patiently whilst the lady looked into it

No problem says she we can do the change etc and the cost increase to cover the remaining 8 months will just be £1380 .....

clearly the Streetfighter wasn't their cup of tea so to speak

I insured it elsewhere for a reasonable £270

RedRick Esq. said:

I was with the AA for bike and car insurance and for several years they were very good both at renewal and mid term change

Then I bought the Streetfighter

I was 4 months into the policy on the multistrada for which I was paying £240 per year

Told them of the change of bike and then sat patiently whilst the lady looked into it

No problem says she we can do the change etc and the cost increase to cover the remaining 8 months will just be £1380 .....

clearly the Streetfighter wasn't their cup of tea so to speak

I insured it elsewhere for a reasonable £270

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It is not unusual for insurers’ appetites to vary, depending on what they are being asked to insure. A streetfighter is, I assume, not a standard run ‘o the mill vehicle, which might well not fit into the tidy algorithms of some insurers. In short, they price themselves out.

This risk appetite and wild price variances is not limited to UK vehicles. I renewed a large global property reinsurance at 01 January 2022, where the price variations swung from an annual premium GBP 2,800,000 to GBP. 7,900,000 for ostensibly the same risk exposure. Funny old world.

Wapping said:

It is not unusual for insurers’ appetites to vary, depending on what they are being asked to insure. A streetfighter is, I assume, not a standard run ‘o the mill vehicle, which might well not fit into the tidy algorithms of some insurers. In short, they price themselves out.

This risk appetite and wild price variances is not limited to UK vehicles. I renewed a large global property reinsurance at 01 January 2022, where the price variations swung from an annual premium GBP 2,800,000 to GBP. 7,900,000 for ostensibly the same risk exposure. Funny old world.

Click to expand...

It is a funny old world made funnier by the fact that it is the same underwriter just through a different broker

Just renewed my car insurance

Renewal premium from Avila was £850 - last year it was £625

Went on their site and asked for an online quote - £553 - he offered to drop it to £750

Went back to the original quote and asked why the difference - could not explain just that they are live quotes and the price offered can differ.

Obviously I decided to pay the £750

karlp said:

Just renewed my car insurance

Renewal premium from Avila was £850 - last year it was £625

Went on their site and asked for an online quote - £553 - he offered to drop it to £750

Went back to the original quote and asked why the difference - could not explain just that they are live quotes and the price offered can differ.

Obviously I decided to pay the £750

Click to expand...

And why not pay the £553 (online quote)?


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simondippenhall said:

And why not pay the £553 (online quote)?


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I think Karl was being sarcastic.

I’m with CN. Previous premiums were around £270. Each year they tried to raise it by varying amounts but, on being challenged, they could not explain the increase and brought it back down again.
This year it went up considerably and they wouldn’t budge.
Cancelled the policy and went on a comparison site.
Got a new policy with ……. CN (online) for £98.

A guy at work was telling me his wife had been renewing automatically with the same company for years.
She had no idea how much the premium was.
When he checked, it was over £600.
When challenged, they dropped it to £300, but a check on a comparison site showed several options less than £200.
Absolute shysters, the lot of them.

AberdeenAngus said:

I think Karl was being sarcastic.

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You are correct

I'm surprised you guys are surprised how we are all getting scammed.

The admin fee is the biggest con ever, like they just pick a figure and tell you what it is, nothing for them to do other than to update their own files.

What I am surprised at is the cost you guys are being quoted, don't think I've paid more than £120ish for any of my last 6 or 7 bikes.

Yes, me too around £70-120 is average depending on which bike I insure.
The problem is mid-term changes or early cancellation, not the annual premium at the start of the policy.

When I was pricing jobs for clients the main factor was how much I could get them to pay, I'm pretty sure builders do the same. Likewise insurance companies.

If you can sell something for £100, why would you sell if for £50?

stolzy said:

When I was pricing jobs for clients the main factor was how much I could get them to pay, I'm pretty sure builders do the same. Likewise insurance companies.

If you can sell something for £100, why would you sell if for £50?

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Exactly, companies are in business to make money. The moral is to read the t&cs and negotiate when buying anything until you get to a win-win both parties happy.

casbar said:

Exactly, companies are in business to make money…

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And it’s easy to see what happens when they don’t, as in the example of MCE and other insurers before them.

That being said, whist the selling of insurance is heavily regulated, the sale of private motor and household insurances (the mass market products everyone needs) has evolved into the Wild West, encouraged in part at least, by a gullible (and often quite lazy) public. All that the regulator has done is to apply the same basic selling rules to public service insurance providers as was applied to banks and building societies. Next will be the likes of Sky, BT, the phone companies and the like, all with their ‘new customer’ deals and special offers.

Where though do you draw the line? A sudden announcement that P&O have brought in a ‘Buy it now’ 20% off offer would be lauded on these pages, especially by those that had not booked their crossing three months earlier. Of course those that left their bookings to the last minute and found the the fates had gone up, would regard the whole world as a rip-off….. but that would just be a possible disadvantage of “Just wing it, mate”.

Difference in prices between brokers is partially to do with algorithms.
Plus, the additional boxes ticked off or on as part of the quote.

When the person on the phone says ' I will have to speak to my supervisor' if you query a price difference, means let you sweat for a few minutes.

There are so many variables to opt for or not to take up on policies.
How many people go into detail?

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