Personal Finance: Nic Cicutti's column
Saturday 22 August 1998
Which is why, despite all the hype at the beginning of this week, the motor-cover pledge from Barclays, jointly offered with Privilege Insurance, gets a thumbs-down.
For those who missed the details in our Midweek Money pages on Wednesday, here's the deal. Barclays is offering to undercut the renewal premium on offer from another insurer, for any motorist driving any car.
Put like that, it looks like a no-brainer. After all, what sensible motorist would want to turn down the offer of saving money by making one simple call?
Well I can think of plenty of people. Let's go back to basics. Most people hate the time-consuming process of phoning up six or seven insurers every year. Many will stick with their existing motor-cover provider and will stir themselves only if the renewal cost is exorbitantly high. Insurers know this - it is, after all, how many of them make their money.
What they do is offer initial cover at a preferential rate, only to hike it up at renewal time. They bank on clients staying with them for at least two or three years and moving only when absolutely necessary.
This is where Barclays comes in. By undercutting renewals, it does offer the prospect of some savings. But those savings would almost certainly be available elsewhere and, probably, would be greater if consumers shopped around. Yet Barclays is only offering to undercut a person's existing insurer, not any quote available on the market. Moreover, the deal is available only for 12 months. After that you are on your own again.
Sure, Barclays will save some of us money. And its entry into the mass motor insurance market will force competitors to keep the cost of their renewals down, so there are other indirect benefits for all motorists.
Yet I can't help feeling slightly cheated. After all, it is not impossible to put together a far better package than that. "Such as?" you may ask.
Well, how about simply offering to undercut any renewal premium by at least pounds 10. There might have to be some exceptions to this deal for boy racers and those with multiple driving convictions.
I can already hear the industry muttering that such a deal is impossible. I'm not so sure. A year or two ago I was contacted by one insurance broker who wanted to discuss offering this option for readers of the Independent. And why not? After all, Indy readers are fairly careful, young but not babies, quirky but not mad, just the kind of consumer group any insurer would like to have on board - or so these blessed readership surveys would have us believe.
While the discussions foundered for some trivial reason, they indicate that some things are possible even when the perceived wisdom says they aren't. Were Barclays not so consumed by the desire to vacuum up their rivals' policy-holders at minimum cost, they might have come up with something better.
As it is, motorists seeking the best deal on their car insurance still need to shop around for it, rather than rely on just one call. And Barclays leaves me with a bad taste in the mouth.
Life & Style blogs
DNA hope on schizophrenia: Research breakthrough points at over 100 genes
Husband creates spreadsheet detailing wife's 'excuses' for turning down sex
UK pirates will get four warning letters a year
Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
Man takes most pointless Uber cab ride of all time
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 Fight Club 2: Chuck Palahniuk sequel is a 'meta-fictional comment on the cultural response to the original'
- 3 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Students offered grants if they tweet pro-Israeli propaganda
Excellent Salary: Austen Lloyd: Senior Private Client Solicitor - We are makin...
£50000 per annum + benefits: Progressive Recruitment: A unique and rare opport...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£260 - £325 per day: Progressive Recruitment: IT Trainer: E-Commerce Experienc...