Hastings Direct fined by FSA after car insurance pricing error

[Legal Beagles]

One of the UK's largest direct motor insurers has been fined £735,000 after leaving thousands of its policyholders without car insurance after a pricing error.

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[Legal Beagles]

FSA fines insurer that dropped customers it had undercharged

A car insurance firm that cancelled around 4,550 policies after a computer error caused customers to be undercharged was today fined £735,000 by the City watchdog

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[argentarius]

Re: FSA fines insurer that dropped customers it had undercharged

This is a good outcome.

It isn't reasonable that insurers view an insurance contract as binding on the customer, at the cost of (sometimes high) early cancellation penalties, but then expect to be able to cancel policies for no reason other than their own ineptitute without giving any compensation at all.

Obviously, insurers should be able to cancel a policy if the risk has changed in a way to make it unacceptable to them. But that wasn't the case here - they simply worked out the premiums incorrectly, but in a way which the customers wouldn't have been able to tell was incorrect (because of the huge differences between premiums charged by different insurers in any case).

[bluebottle]

Re: Hastings Direct fined by FSA after car insurance pricing error

I fully agree with you. The law must be changed to provide an even playing field for both insured and insurer. The insurance industry has been getting away with far too much for far too long and it's time for them to be stopped, whether they like it or not.