Recently, I reported a damaged iPad to AA, with which I have my contents and buildings insurance. The insurer arranged for it to be collected and then called to say it could be repaired, but I must pay my £150 excess.
I explained the iPad was four years old and it was not worth spending this on an “elderly” piece of equipment. I was assured this would be noted as a “no claim”.
Then AA Insurance sent me a renewal notice that increased my annual contents premium of £153 to £452.
The insurer told me this was due to my having reported “an event” regardless of the fact that no claim had been made. Had I been informed at the time of the report how the insurer operated I would not have pursued the claim.
However, it had mentioned nothing of this.
AA insurance said that under the terms of insurance, customers are obliged to notify their insurance company of any loss whether or not a claim is made. It says that the policy you have asks: “Have you suffered any loss or damage, whether or not subject to an insurance claim, in the last five years?”
This seems far too all-embracing. Where is a line drawn? Does it include, say, a broken vase or a ring mark on a table caused by a misplaced cup of hot tea that no claim is being made for? AA said that, strictly speaking, if it is something that could be settled by an insurer, then it should be reported.
It said in most cases it would not affect a premium if no claim was pursued. However, “several notifications or small claims will statistically indicate that a more significant loss is likely to happen and the renewal premium reflects that”.
It said that, although you notified the insurer that you no longer wished to continue the claim, work had started in progressing it and administration costs had been incurred.
It then said this should not have been registered on AA’s system as a claim, but instead as a notification, and that a mistake had been made in this respect.
Meanwhile, it acknowledged that the renewal premium had been too high. AA said that normally when one of its customer’s renewal quotes shows a large increase it will first source comparative quotes from the other insurers on its panel.
Due, it said, to a systems error for which it apologised, on this occasion this had not happened. Instead, only when you inquired was a new cheaper quote, albeit higher than the previous year’s, manually acquired from another insurer and offered to you. After that, you sourced cheaper cover elsewhere and went with that.
AA said systems were being modified as a result of this case and agreed to write to you explaining this for your records. It said it would request that the underwriter take the notification of the incident off the Claims & Underwriting Exchange (Cue), which is what you had wanted from my investigation.
More than four weeks later, the letter you were supposed to have received still had not come and you had heard nothing further from the AA or its underwriter.
Then it turned out you had taken the matter to the Financial Ombudsman Service. You initially denied this but then said you had referred it before my involvement but had not heard from it. It was now in the system and the resolution I had gained for you was put on hold. Having been a persistent correspondent all then went quiet.
When I called, you told me that the ombudsman’s adjudicator had turned the case down. The situation now is that AA’s underwriters are not, after all, deregistering the notification on the Cue.