Change in address leads to increased car insurance premium

We recently got a mail from a reader by the name of Geraldine Conaty which started with the three words: "Can you help?" Geraldine had just moved from Dublin to Longford but that wasn't the problem.

“My car is insured with the AA,” she wrote. “I rang them to change the address on my policy and was told there would be a charge of €81. I asked why as my car is parked in my drive in my estate exactly the same as it was in Dublin. I was told the charge was ‘computer generated’.”

Geraldine was unsurprisingly unhappy with this answer and she persisted and again asked what exactly the charge was for as there was absolutely no change to the policy except moving county.

“Again I was told it was ‘computer generated’ and after putting me on hold to speak to one of her colleagues, the woman I was speaking to told me it could be that there is a higher rate of theft in Longford or a higher rate of accident claims.”

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If your existing insurer wants to make it harder than it should be for you to switch from them to another provider, they can do that handily enough

Geraldine was astounded by what she was hearing and deeply sceptical that this could be the case. She refused to buy the suggestion that Longford was a riskier prospect than Dublin.

She could not, however, refuse to buy the car insurance. “After about 40 minutes of trying to get a concrete and logical answer [which I did not get], I paid the charge purely out of fear that something would happen and there would be an issue about the incorrect address on my policy,” she continued.

She asked us if we could have better luck in finding out why she had to pay about 20 per cent more for her car insurance simply because she now lives in Longford and not Dublin. We did our best.

But we started out with a heavy heart as we know that when it comes to car insurance – and this is not specific to the AA – the companies have us all over a barrel.

Unlike many other financial products that you might consider buying, car insurance is a legal requirement and one we can’t just get rid of unless we also get rid of our cars. And if your existing insurer wants to make it harder than it should be for you to switch from them to another provider, they can do that handily enough and there is very little by way of comeback. That is not to say the AA would do that but merely to highlight how difficult it can be when someone is in this position.

We contacted Conor Faughnan of the AA to see how the company could justify a premium increase simply because someone was moving from the capital city to the heart of rural Ireland.

He first pointed out that the AA doesn’t get to control premium prices because it is a re-seller of insurance. “We’re not underwriters. We have a panel of insurers that we have done overall deals with but we don’t get to set the rates,” he said.

He made the comparison between a motorist buying one insurance policy and the AA which buys about 10,000 a month for its customers. That, obviously, gives them a lot of buying power and the chance to squeeze insurers for good overall deals “but we can’t change individual ratings or risk factors”.

We are still being ripped off by car insurance companies that are doing it because they can get away with it

So why are insurers’ prices so apparently random? “It is a bit of a black art sometimes even trying to figure it out. For each risk an insurer will weigh as many as 50 different factors: age, location, occupation, car type, etc. Everything except gender [which has been illegal since 2012],” he says.

Geraldine can blame the whole palaver on algorithms. “All of the risks go into the hopper and it will also include the overall balance of the book of policies the insurer already has. Like bookies, they are looking to equalise risk across thousands of polices, not individually. If an insurer is statistically over-represented or under-represented in any category, that can result in the software adjusting the price offered,” Faughnan continued.

He said that because of the complexities of the algorithms, you will get “anomalies and wrinkles” on occasion. “Sometimes the software spits out a price that is anomalously good, so by all means take it. Other times it produces a figure that appears on the face of it to be too high so shop around,” he added.

He accepted that it was a source of frustration for consumers “because the prices offered appear arbitrary and anything but transparent. Overall that is a fair comment.”

He then got on a hobby horse of his – but as it is a hobby horse of ours we indulged him. “We all know that prices overall are too high. They shot up in 2014-2015 and have since normalised at high levels. This has taken the political heat out of the issue but it is still not solved,” Faughnan concluded.

Or, to put it another way, we are still being ripped off by car insurance companies that are doing it because they can get away with it. Although with the EU looking somewhat closely at the goings on in the industry here, that could be about to change.

Ryanair and refunds

"I am a great fan of Pricewatch and over the years have enjoyed reading your various articles in The Irish Times," started a mail from a reader called Adrian Gordon, a man who clearly knows the most direct route to our heart!

“I now find myself in a situation which, quite frankly, I find unbelievable,” he continued.

“On Friday, April 26th, my wife and I took a flight from Malaga airport to Shannon Airport. Due to weather conditions we were advised by the pilot as the plane began to land that we were landing at Dublin Airport due to the weather at Shannon Airport. The pilot also advised all passengers to go to the Ryanair desk at the airport and that transport to Shannon would be arranged for us. The flight landed at Dublin Airport after midnight,” he says.

“As advised we presented ourselves at the Ryanair desk beside the baggage carousels at Dublin Airport. The female Ryanair staff member there advised us, and indeed other passengers, that as a lot of flights had to be diverted from both Shannon and Cork Airports due to the weather that there were no more buses available for them to hire to convey us to Shannon. She told us to hire a car or get a taxi to Shannon and that Ryanair would refund us the cost within seven days.”

Adrian did not have his driving licence with him so he and his wife had no option but to hire a taxi to Shannon Airport at a cost of €440.80.

“I subsequently filled out a claim form and sent it and a copy of the taxi receipt to Ryanair.”

It was 'disappointing that it takes contact from a journalist to prompt a large very profitable company to give a customer what they have promised'

But Ryanair refused to refund the cost of the taxi and insisted “that surface transportation was arranged by them for all passengers”.

Adrian protested and said he had been informed that no transport was available but to no avail. “I subsequently made contact with another passenger on the same flight and they had to hire a car to get to Shannon Airport following the instructions of the Ryanair employee.”

Then Adrian contacted the Irish Commission for Aviation Regulation who told him that as the flight originated in Spain, it was a matter for the Spanish Commission for Aviation Regulation. "They provided an email link to this office which when viewed is written entirely in Spanish which I don't speak. In any case my complaint refers to what happened on the ground in Dublin so I don't see what it has got to do with Spain.

“Presumably my Irish taxes are funding the Irish Commission for Aviation Regulation and I should not be fobbed off to a website written in Spanish even if we are all EU members. Are Spaniards in a similar situation to mine referred to a website written in Irish?”

Adrian was totally frustrated "by both the attitude of both Ryanair and the Irish Aviation Office. The fact that I am aware of at least one other passenger who also had to hire transport to get to Shannon confirms what the Ryanair employee told passengers. To the best of my knowledge this other passenger has not submitted their claim to Ryanair yet."

We contacted Ryanair and received a terse statement. “We’ve resolved this directly with the customer,” is all it said.

It didn’t really satisfy us and we were left wondering what it actually meant. So we got back on to our reader who was, thankfully, more forthcoming.

Adrian told us that his wife had received a telephone call from a woman in Ryanair after we had made contact with the airline. This woman stated that she had received an email asking her to get in touch with the couple to explain that they would “receive a full refund within seven to 10 days. When my wife told her of the upset this matter had caused us, the woman said she had just received an email asking her to advise them of the above.

“In view of our previous experience, my wife requested her to email us confirming the conversation. To date we have not received any confirmation. Obviously having been told before we would receive a refund and then being categorically told that we were not entitled to any refund leaves us in a sceptical frame of mind which will remain until we actually get the money into our account.

“No apology was offered and given that we were originally told that we would receive a refund within seven days it is annoying that we now have to wait a further seven to 10 days. The fact that we received no apology or explanation or even a confirmatory email from Ryanair when it was requested is upsetting as Ryanair’s attitude was that we were trying to obtain money which we were not entitled to.”

He said it was “disappointing that it takes contact from a journalist to prompt a large very profitable company to give a customer what they have promised them”.

He got the call promising the refund on Saturday, May 4th and then he mailed us on Monday, May 15th, to say there was still no refund.By last Wednesday evening. There was still no sign.

Behind the times at Bank of Ireland

Poor Bank of Ireland appears to be struggling to keep up with technological advances like using computers to update customer accounts in real time and it is appears to be constantly thrown by things like bank holidays and weekends. It is also one of the few banks in Ireland that seems unaware of advances in technology that allow people to use their phones as payment devices. But that's a whole other story.

This story is Deirdre Murray’s. “I’ve had it up to here with Bank of Ireland charges on our current account,” started her mail . “They keep making card transactions made on a Friday disappear as if they had not been done. The funds show as available in the account to spend then.

“If you do any debit transactions that take these funds, then not only are you in unauthorised overdraft by a Tuesday or Wednesday when the debits magically reappear, but you have been charged at money lender rates by the bank for it.”

She cited the example of the Easter weekend. She gets paid weekly and on the Friday she paid her mortgage by card and bought diesel for the car and did her weekly shopping.

“On the Saturday morning all the Friday card transactions disappeared. I used the card three or four times for small amounts on Saturday and Sunday and on Tuesday the account was €287 overdrawn.

On the Wednesday and Thursday of the following week, the bank hit her with 11 €10 referral fees on top of that – a total of €110.

“I contacted the bank and got some rubbish about pre-authorisations from the merchants for the card transactions. It does not wash because it happens for ATM transactions too. No merchants involved there. This is the banks’ problem. If they have authorised a transaction, then that money should not be shown in available funds. In this day and age I should not have to keep receipts or a mental bank balance tally over a weekend, because I can’t trust the bank balance shown in the app or the browser to know how much money I have [or have not].”

We contacted the bank and got the following response: “Normally when customers use their debit cards, transactions should reflect on their account and their available funds should adjust immediately. However, bank holiday weekends result in some transactions not being fully processed and, therefore, not reflected in the balance visible to the customer. We are working on improvements to this.”

While a cursory reading of this response might make you think that the bank is working on this problem as a matter of urgency, we remain to be convinced. This is an issue we have highlighted with Bank or Ireland repeatedly and problems of this nature have been experienced by our readers for years yet still the bank seems incapable of dealing with it.

They will blame merchants and they will blame other bank’s ATMs and they will blame weekends. Ultimately, as our reader says, it is the bank’s problem. Handily for it, it profits from the problem on occasions such as this one.