My home insurance ran out in Feb. The insurer increased the premium by 22% so I shopped around and found the same cover for 20% less than I had been charged for the previous year (£100 less than the cost of the actual renewal).

I got a letter from my bank at the time of renewal informing me that the insurance company had been declined when they tried to make an unauthorised debit on my account (I had not been asked to set up a direct debit by them). I was pretty peeved at the insurer’s discourteous behavior!

I thought that, like with previous insurance policies, if you don’t pay to renew, the policy just lapses – WRONG!

I took out insurance with a different company and thought no more about it.

The old insurance company continued to send letters every few weeks which I assumed were the usual spam (I get loads of unsolicited letters from insurers that I have done business with, or obtained quotes from). I didn’t bother to open them, I have many other things to worry about and am too busy to read junk mail – big mistake!

A month ago I eventually decided to open the latest of these letters, only to discover that my policy had been cancelled because they were not able to contact me for payment (even though they have my home and mobile numbers), but it said that I still owed them £120! The letter was a final warning before they passed the matter to a debt collection agency. In their eyes, they had insured me for one month, yet they were/are demanding £120!? Incredible!

I called them on their premium rate number and explained that I had taken out insurance with a different company. They asked me to send proof that I had taken out insurance with another firm (which I did – recorded delivery – they were not able to read all of the copy aparently). In the meantime they instructed a debt collection agency. I have faxed off the policy to the insurance company again and also to the debt recovery agency.

I am assured that when they have proof, the debt will be wiped anulled.

My credit rating won’t fare so well!

I think the person who thought this auto-renewal idea up is a prize twxt! His employers obviously think he is a superstar because the debt collection agency told me the were dealing with loads of similar cases and that like me fall, foul of this pitfall.

I regard this as a scam because the inurance company should make it very clear at the point of purchase that their policy is for an indefinite duration and not just the standard 12 months. They should also send a recorded delivery letter when perceived arrears are a month overdue (if they have been unable to contact the customer by letter or any of the telephone numbers given to them). They should also have to prove that they have made every effort to contact customer before they pass the matter on to a debt recovery company (a “signed for” letter). They should also provide a contact email and not just a premium rate help line number.

It smacks of insurance companies looking for ways to boost their flagging revenues. They appear to view their customers with contempt.

I rarely get caught out like this. I accept I should have read all my mail, but in life today there are so many hidden pitfalls designed to catch you out. I can think of dozens. Life should not be so unduly complicated for people!

I expect a lot of comments about not reading my mail, but I thought I would share this with you so you don’t fall foul of this.

It feels like many firms now think they can create all manner of elaborate schemes to rip customers off. Good customer relations and building long term relationships is something which eludes them. I hope people vote with their feet and these unscrupulous firms fail!

Every policy I have or have had has made it clear up front that it is an auto renew if it is one. They have also sent a revised premium letter for the auto renew, which advises me that it will auto renew and stating that they will use the current payment information they have.

It’s good business as it ensures your coverage doesn’t lapse – you’d be the first to complain if you assumed it would run on and then made a claim and found you weren’t covered, surely?

They’ve clearly offered you a way out of the debt so I can’t see the major issue here other than actively managing your mail to ensure that you are able to read them.

It’s good business as it ensures your coverage doesn’t lapse – you’d be the first to complain if you assumed it would run on and then made a claim and found you weren’t covered, surely?

Call me oldfashioned, but no, I wouldn’t complain if my policy had run out and wanted to claim because I had subsequently sustained some sort of loss. I prefer to have control over whether I renew a policy, not the insurance company. They shouldn’t try and take money from my account without my consent either!

I was not informed that this was an auto-renewal policy. All the policies I have ever had (25-30 yrs worth) have lapsed if you do not pay a renewal premium within two weeks of expiry (two weeks grace has always been the standard). No ongoing obligation! Simple!

Thank you for your comments though.

i hate it – last week got a letter from car insurer for Mrs antigee saying they had been asked not to renew the policy by someone else but couldn’t act on their instructions as policy is in her name so were going to go ahead and renew with creedit card details on file

this was despite me ringing their “cancellation” – another word for “trying to requote you line” a week earlier and cancelling renewal – at time they said i wasn’t the policy holder – i pointed out it is a business policy and that the schedule states that i own the car and it is my credit card so i’ve got every right to cancel the renewal – its not their responsibility to make sure that you are insured a couple of reminder letters suffices – after a check OK told cancelled – plus i’d already returned the certificate in the post stating didn’t want to renew

inertia selling con’ and security wise get peed off having my card details kept on file when i haven’t requested it

Sorry to hear about your plight Antigee. Seems like you were a lot more proactive about the matter than I was. It seems like your efforts were a waste of time though. I understand why they had problems taking your word for it – they are bound by security check processes now, but if they had checked the debit details from the previous transaction, they would have seen your initials.

I think the whole business of automatic renewals should be outlawed unless the customer specifically requests such a service. The insurer should have to get a signed agreement from the customer, including a direct debit mandate!

I wouldn’t use a credit card for purchasing insurance as the debitor has the “cardholder not present” option. So you would be none the wiser until yo get the credit card bill when they automatically renew the policy.

I shall be watching all my insurance policies like a hawk from now on!

. The insurer should have to get a signed agreement from the customer, including a direct debit mandate!

100% agree – if you want peace of mind you can have the option of automatic renewal and sign up to it – as to being pro-active simply because I’ve been caught before similar to you – ignored renewal notice as didn’t intend to renew and it quoted a credit card that had been cancelled – had sent back certificate but didn’t seem to stop the demands for payment

I’m getting REALLY fuxxed off with being harassed every day by some numpty from the debt collection agency Budget Insurance have instructed! BUDGET Insurance have never called me at any stage nor verified that I have recieved any of their letters, but when I called them on their premium rate help line weeks ago, they assured me they would not involve a debt collection agency, but 2 days later I started to get daily harassment to pay a sum that I simply do not owe!!! WTF!!!

Budget Insurance have relieved themselves of their duty of care to me as an honest paying customer. I discovered today, 16 months after I took out my policy, that I should have written to them 30 days before my policy expired to tell them I did not wish to renew. What bullshit!!

I am incensed at their arrogance!

Fxxk their unreasonable terms and conditions. IMHO they are unlawful without a signed agreement from the customer!

The envelopes that they have sent me say “smart people budget” NO! Stupid people use Budget Insurance! I was one of these stupid people!

Don’t touch them with a bargepole!!!!!!!!

I regard this as a scam because the inurance company should make it very clear at the point of purchase that their policy is for an indefinite duration and not just the standard 12 months.

It’s not for an indefinite period – its for 12 months, but if you had actually bothered reading your policy booklet then I have no doubt that the automatic renewal would be stated in there clearly.

I called them on their premium rate number

Perhaps if free phone numbers were important to you then you should have checked that when you took the policy out rather than just taking the cheapest option. (Where do you think they make their money AFTER giving you a cheap price?)

They should also send a recorded delivery letter when perceived arrears are a month overdue (if they have been unable to contact the customer by letter or any of the telephone numbers given to them). They should also have to prove that they have made every effort to contact customer before they pass the matter on to a debt recovery company (a “signed for” letter). They should also provide a contact email and not just a premium rate help line number.

Why should the insurer spend more money trying to contact you when it is YOU who have defaulted? You received the letters, but YOU were too stupid to read them.

All the policies I have ever had (25-30 yrs worth) have lapsed if you do not pay a renewal premium within two weeks of expiry (two weeks grace has always been the standard).

Obviously not. Two weeks grace has never been the standard for any insurer that I’ve been with or worked with.

Budget Insurance have relieved themselves of their duty of care to me as an honest paying customer.

Perhaps you should think about what you are buying when you go to a company called Budget, and also knowing that insurers have a reputation for being unscrupulous, perhaps try reading the small print?