Archive for January 2014
Third Party
I've been asked to sort out motor insurance for a relative who's not computer-savvy.
For yonks this relative has been brand-loyal to one insurance company, I won't tell you which one but I can tell you that it's well-known, palindromic and based in East Angular. The renewal letter says that the premium for the next year is a shade over £430 for a car that's valued at only £250, and that a £20 discount can be had for renewal online. That means we're working on beating a figure of about £410. See, I knew that my A-Level in Pure & Applied Maths would come in handy one day.
Anyway, back on the 'puter we plugged my relative's details into a well-known insurance-comparison site, and sat back to wait for the flood of results.
Premiums ranged from a paltry £274.77 to a whopping £1946.17!!!
Figuring that my relative would prefer to be insured through a reputable "heard of" company, and wouldn't want an online-only service, we looked at the cheapest quote supplied by a well-known company. The best suitable deal turned out to be with a popular breakdown recovery organisation. Their verified like-for-like premium would be a shade over £330. Not bad - a saving of over 80 quid.
Because we'd saved the quote on their website, they sent an email confirming the terms. In that email they kindly provided the name of the company with which they arrange the cover... yep, you've guessed it, it's the current insurer.
Now I'm no business guru but I'll wager that the popular breakdown recovery organisation isn't acting as a go-between for free, so let's assume that they're on something like 10% commission, say £30 for the sake of easy maths. That makes the premium differential a tidy £110, well over 25% of the current renewal.
Or, to put it another way, the current insurer is hiking the premium by about 33% when dealing direct.
Which begs the question... why didn't the current insurer offer such a good deal as the popular breakdown recovery organisation, for what is, to all intents and purposes, exactly the same service? That failure to do so may well cost the company some business - I suspect that when I tell my relative about how the current insurer's premiums vary so much depending on the supplier, brand-loyalty may well go out of the window.
No Meerkats were harmed in the production of this post.
