LEE BOYCE: The insurance loyalty penalty strikes again

We will collectively save you billions of pounds by banning the insurance loyalty penalty. That was the rallying cry of the city watchdog last January.

No more sneaky insurers auto-renewing customers for higher premiums on a comparable policy to boost the Treasury while offering cheaper deals for new customers. Fast forward to January 2023, and those words are starting to sound hollow.

Take my auto insurance quote. Mrs B and I drive a Skoda Karoq. We bought it brand new in January 2019 and insured it through Diamond.

Mrs. B. is the lead driver and chose Diamond when we bought the car because it offered one of the cheapest quotes.

She had previously been a customer with another vehicle for over a decade. When we bought the car the annual insurance was £396.48. A year later, after the usual haggling where we threaten to leave, the price fell 8.2 per cent to £363.59.

In January 2021 it rose to £400.15 and in January 2022 it stood at £406.97. Because these quotes were in the rough estimate of what we originally paid, we stuck with Diamond.

Since our auto insurance policy expires next week, we received our annual “auto-renew, no action required” email.

Except there was devilishness in the detail – the quote was up a whopping 21 per cent to £492.54. This is by far the largest auto-renewal quote we’ve ever received for a vehicle in a year.

We called Diamond on Saturday. I came out furious. We got a lame explanation – something about our zip code – before the call center agent put us on hold.

We were eventually told the best he could do was £453.55 – £38.99 less but still more than last year. When I said we intended to shop around, the quote suddenly dropped by £10 to £443.55.

That, I was told, was as low as he could go. Still almost 10 percent more than last year, despite more kilometers on the clock, a car that is probably worth less, ten years without claims and especially the ‘L’ word: Loyalty.

On a comparison website, the lowest price from a rival insurer we recognized – Churchill – came in at £343.13, or £100 cheaper.

Mrs. B called Diamond again on Monday, but it didn’t budge. For the first time there was no room for hard negotiations. As Jeff Prestridge reports on our cover, it’s also the first time we’re hearing it from readers.

The Financial Conduct Authority must protect loyal customers. If people are being slapped with huge increases in auto-renewal, something is very wrong. It’s time the FCA urgently investigated what’s going on.

diesel gap

Sticking to driving – why are diesel prices so stubbornly high? The gap between unleaded and diesel is so wide that even I notice it – and we don’t drive diesel. At our local BP garage there is a difference of 25 cents per litre.

It’s a similar picture everywhere I drive. In the past two decades, diesel was typically 5 pence more per liter than petrol.

That has now quadrupled. It’s bad news for diesel motorists, but especially for businesses, many of which rely on ‘workhorse’ diesel commercial vehicles.

Now a cynic might argue that it’s all part of the demonization of diesel – keeping prices high to deter people from owning a diesel car.

If not, then petrol retailers seem to be simply penalizing diesel owners to increase profits.

O2 anger

It’s frustrating enough to have a fraudulent phone contract opened in your name at O2.

But it is scandalous to have countless contracts signed and then, after notification, to sell the ‘debt’ to collection agencies.

The final insult? The £30 compensation offered to the victims after all the threatening letters and someone building up debts in their name. O2 should put a 0 at the end of that ‘offer’ – and get to grips with this farce now.

l.boyce@dailymail.co.uk