Admiral insurance customers are entitled to a refund after being sent misleading documents around their policy renewal date.
New rules introduced in April say that insurers must state what premium customers paid in the previous year along with the proposed premium for the coming year so customers can see whether their renewal quote offers good value..
However, the Financial Conduct Authority, who brought in the rules, found that Admiral showed some customers the previous year's premium before any discounts were applied as opposed to what the policyholder had actually paid.
Admiral hasn't said how many people have been affected, but has agreed to contact those who renewed after 1 April 2017 to let them know that they can cancel their home or car insurance policies penalty-free.
The insurance giant is in the process of making changes to make sure that it’s fully compliant with the financial watchdog's rules.
Admiral Insurance has agreed to contact customers who may have been given inaccurate information in renewal documents— Chris Choi (@Chrisitv) June 16, 2017
Have other insurers been doing this?
The FCA is assessing companies’ implementation of the rules to make sure they are giving customers clear and fair disclosure on their renewal prices. It says that it has seen good practice along with some ‘concerning examples’.
Jonathan Davidson, executive director of supervision retail and authorisations at the FCA, said:
“It is vital that insurers give customers the right information so they can easily compare premiums and make a choice whether to shop around.
“When introducing these measures, the FCA was clear that firms should be ready from April 2017. We will continue to keep a close eye on the industry’s response to ensure firms are complying with the new rules and will take action where necessary.”
However, the rules seem to have been open to misinterpretation.
Ian Hughes, chief executive of market research firm Consumer Intelligence, said:
“Insurance customers aren’t quite getting the transparency the FCA envisioned on renewal disclosure. We are just over two months into the new era, which was supposed to help shopping around and already there are problems with the likelihood of more to come.
“The rules were designed to make it easier for customers to find the most competitive quote but our experience is that some insurers are interpreting the rules in different ways with some not quoting the actual price paid last year when sending out renewals. Insurers who are being completely transparent are entitled to be unhappy.
“Drivers and homeowners can save up to £100 a year by switching provider after a year. It is always the best policy to shop around at renewal to make sure customers have the best cover at the best price.”
Thinking about making the switch? Remember to shop around and always, always – read How to haggle and save a fortune for more. Get the switching process started at the loveMONEY car insurance comparison centre.