BBC revealed that most online car insurance companies refuse approximately one quarter of the applications that arrive at their desk.
These revelations came to light after a prominent online car insurance company’s admission to BBC that such industry practices were very common in car insurance policy covers.
Earlier, BBC Radio 5 Live had investigated into a complaint made by a disgruntled customer who said he had been charged 75 pounds by an insurance company but was still refused cover.
The customer, Ashley Bennett, 25, had been looking for a cheap car insurance policy on her Fiat Punto. She contacted an online car insurance company and settled for a reasonable price. After sending a copy of her driver’s license and a certificate stating that she had not been involved in any accidents in her previous year of driving, the company did an about-turn by claiming it had not received any documents from her end. Bennett then proceeded to resubmit all her documents and received another mail from the company which said that her documents had been received and if any further information was required, she would be notified.
Only a few days later, Bennett got mailed by the company informing her that, as she had not submitted her documents, her application had been rejected.
The mail went further to state that she had not submitted her photo card license, which was a necessary requirement according to the firm’s terms of business.
Ashley Bennett argued that these terms had never been mentioned to her in the previous correspondences. The industry experts in on the call with BBC Radio 5 Live also confirmed that photo card licenses were not pre-requisites for insurance applications, unless it was an exceptional case.
“It wasn’t very clear to be honest and when I tried to get through to them to sort out the problem over the weekend, no-one was answering,” said Ashley Bennett to 5 Live.
The company has been slammed by the British Insurance Brokers’ Association, who cited their refusal rate as “very high” and stated that regular market rates were relatively much lower.
The company in question rebutted Ms Bennett’s allegations by saying that it took customer information validation very seriously and that it adhered to prevailing industry practices when dealing with customer complaints.
However, in Ms. Bennett’s case, the cat and mouse game didn’t just stop there. In addition to suffering the 75 pound loss and rejection of her application, she had to seek alternative car insurance cover, until which she wasn’t allowed to drive.
She says: “Obviously I couldn’t use the car and it was very stressful trying to figure out if I could then go on and try to find someone else straight away.”
The company defended its name by claiming that it gave 23 days to its customers to provide all the necessary documents and information for application processing. If the applicants do not respond within that timeline, it sends recorded letters for period of 7 days before finally cancelling their policy.
However, this doesn’t seem like an isolated case. In fact, the Financial Ombudsman Service says that it has been receiving a bevy of complaints of such nature for the past six weeks. However, it refused to divulge the exact nature of those complaints.
