I received my latest car insurance renewal invitation from LV= in May. Just before the payment was due, I was admitted to hospital. It was a week after the renewal date that I was finally able to ring LV= to sign up for another year. But instead of the original renewal price of £397, I was quoted £544 – for a “new” policy on the same terms. I was told the price rise was due to the fact that previously free features were now chargeable extras to “new” customers. I assume that future renewal premiums will be related to what I pay this year, so the extra £150 would see a permanent increase in my future premiums. Is that fair?
MJ, Goring, South Oxfordshire
Just as we had resolved this complaint, a similar letter arrived from a Co-op car insurance customer with the same problem. In her case, she had been away on holiday and had rung up the day after her renewal was due. Her premium shot up from £318 to £579. A customer of seven years, she was told that her non-renewal had led to her no-claims bonus being lowered from 75% to 70%. The new price was higher because of her husband’s age (81), even though he had been on the previous policy.
We raised the first case with LV= and, once it had been made aware of the circumstances it decided to reduce the premium to the original level. Given that a week had passed since the old policy expired, that is a good outcome. I should say that LV= insures the Brignall jalopy, and the service is usually very good.
The Co-op’s stance was less defensible. To hike the premium by so much for a 24-hour delay is poor. Why would the no-claims bonus be cut as a result of the non-renewal? The Co-op told us: “The difference between Mrs N’s renewal price and the price we quoted her for a new policy was because some of the details on the quotation were different to those on her original policy.
“These details were factors that have an impact on pricing, and what Mrs N was quoted for the new policy. We have telephoned Mrs N to explain why there was a difference in price. As an act of goodwill, we have agreed to reinstate her policy at the original renewal premium.”
Meanwhile, other readers take note, and be aware that insurers are doing this to customers who miss their renewal even by a few hours.
That said, we don’t recommend that readers auto-renew their insurance because premiums often start rising faster than they should.
We welcome letters but cannot answer individually. Email us at consumer.champions@theguardian.com or write to Consumer Champions, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number. Submission and publication of all letters is subject to terms and conditions
