By Robbie Butler
Each March I need to renew my car insurance. This week my quote arrived in the post and unsurprisingly the 2023 charge was €40 higher than 2022. This despite making no claim – loyalty is punished. A quick search of the internet and I found a different insurer at almost €80 cheaper. So, for the 6th time in 18 years, I have changed my car insurer.
In the same period, I have changed my phone provider just once, my television provider once and have never changed my health insurance provider.
Greater competition in the car insurance market helps, but there is competition, or at least the illusion of competition, in health, phone, and television markets, even if it is not as deep.
The key difference for me is the contract default.
At the end of the 12-month period with my car insurance, if I do nothing, the relationship with the insurance provider simply ends. So, to break-up, silence is all that is required from me. This is why I am on my 6th provider.
With the other utilities, as the annual renewal date approaches, I may be contacted (as is the case with health insurance) but if I do nothing, the cover simply roles over to the next year. Breaking up requires action from me.
Television subscription is even worse. I recently had a conversation with my provider as I sought to reduce my bill and was met with the phrase “Oh yeah, you can. You are out of contract”. But despite this being the case, to end the “contract” I was “out of”, considerable effort was required.
The same companies, often engage in asymmetric starting and termination processes. For example, it was possible to upgrade my television sports package online with a simple click. Termination, despite being “out of contract” required a phone call of more than 20 minutes (part on hold/part talking) and conversations with two people, and an “explanation”. Such practices should end.
If customers can buy online, termination must be permitted in the same fashion e.g., the same click of a button.
If all utilities and subscriptions were forced to adopt the car insurance model – termination requires no action from the buyer – customers would generally be in a better place. People would switch providers more often, as the cost of changing would fall dramatically, and greater value for money would result.
Each March I need to renew my car insurance. This week my quote arrived in the post and unsurprisingly the 2023 charge was €40 higher than 2022. This despite making no claim – loyalty is punished. A quick search of the internet and I found a different insurer at almost €80 cheaper. So, for the 6th time in 18 years, I have changed my car insurer.
In the same period, I have changed my phone provider just once, my television provider once and have never changed my health insurance provider.
Greater competition in the car insurance market helps, but there is competition, or at least the illusion of competition, in health, phone, and television markets, even if it is not as deep.
The key difference for me is the contract default.
At the end of the 12-month period with my car insurance, if I do nothing, the relationship with the insurance provider simply ends. So, to break-up, silence is all that is required from me. This is why I am on my 6th provider.
With the other utilities, as the annual renewal date approaches, I may be contacted (as is the case with health insurance) but if I do nothing, the cover simply roles over to the next year. Breaking up requires action from me.
Television subscription is even worse. I recently had a conversation with my provider as I sought to reduce my bill and was met with the phrase “Oh yeah, you can. You are out of contract”. But despite this being the case, to end the “contract” I was “out of”, considerable effort was required.
The same companies, often engage in asymmetric starting and termination processes. For example, it was possible to upgrade my television sports package online with a simple click. Termination, despite being “out of contract” required a phone call of more than 20 minutes (part on hold/part talking) and conversations with two people, and an “explanation”. Such practices should end.
If customers can buy online, termination must be permitted in the same fashion e.g., the same click of a button.
If all utilities and subscriptions were forced to adopt the car insurance model – termination requires no action from the buyer – customers would generally be in a better place. People would switch providers more often, as the cost of changing would fall dramatically, and greater value for money would result.
RSS Feed