Home insurance - automatic renewal by broker?

Am v annoyed right now, and suppose I want some advice from you good, honest AAM'ers as to whether I have a right to be.

We took out home insurance with our mortgage brokers last year. I had got slightly dearer quotes elsewhere, and they automatically quoted for Hibernian when we arranged the mortgage, so we went with that. Seemed a good deal.

Now, we are a year in the house today, and I suddenly realised with blind panic that I hadn't renewed the insurance, so spent the morning looking around for quotes, etc., most of which seem a little cheaper than last year. All good.

Finally, rang Hibernian to get quote from them (we have our car insurance with them, so I know we'd get a customer discount) and they referred us back to our broker. Rang the broker and was told by a new guy that the policy was in the post. I thought he was being dumb and looking at last year's date, and to prompt his realisation, asked whether we were insured for tonight. Sure enough, he said this was until 2008 and that a new policy had been issued last week!!!!

I never received notification of renewal, the opportunity to haggle a quote. I still don't know how much it is - he couldn't tell me that until the woman who deals with it is back tomorrow.

Is this normal?? We know, now, that we tied ourselves in to their commission structure when we took the mortgage with them (BIG MISTAKE), but all communication regarding the insurance was via email, so I have no record of agreeing to automatic renewal.

Any advice?

Not sure if it's normal for a broker to automatically reinsure without notifying you but I would expect that you can put alternative cover in place and get a pro-rata refund from the broker/underwriter on cancelling the existing cover?

For what it's worth I have always received renewal notices a while before existing cover lapses from the underwriter or broker in question. I'm not sure if there is any legal obligation on them to do this as a matter of course.

It's a complete breach of his duties as a broker. He cannot spend your money without your permission. He did not seek information from you nor supply information to you (i.e. his obligation as a broker).

From the information you have given, the policy can be wholly cancelled (as it was issued without your permission) and if reported to the regulator, the broker could face severe sanctions, up to closure of his business.

If I was in your position (and provided you have supplied all the relevant facts), I would call the broker and remind him of his statutory duties to supply and receive information before placing business. If you want a full cancellation, then request that (making sure to place insurance yourself beforehand!). Call the Financial Regulator ([broken link removed]) if you want this infomation confirmed or to ask advice about your situation.

aaaaaaaaaaaaaah,


are you paying by direct debit? If so, there is a little bit on the debit you signed and the conditions attaching, that FOR YOUR PROTECTION (and not for increased Hibernian profits),policy is AUTOMATICALLY renewed each time. That said however, you shoudl still have got a renewal notice about three weeks before renewal.

Ravima said:

That said however, you shoudl still have got a renewal notice about three weeks before renewal.

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Problem is that renewals are sent via normal and not registered post, so no guarantee that the customer will get it even though it had been posted...
And if there were sent by registered post, customers would complain that they need to go to the post office to collect it. Not to mention cost and practicallity from sender view point. A bit of a chicken and egg situation i guess...

Coming back to OP, can you not let the renewall go ahead and switch say next month (unless you paid up front for the year)?

I would reckon that the actual amount of post 'lost' is extremely small. many people use the excuse 'lost in post' to cover a multitude. An post do their level best to deliver mail.

I would cancel insurance policy immediately, once you have a new one set in place. You can ring up most places now directly without having to go through a broker. FBD are great, give them a call.

Don't forget to keep the lender informed if you are mortgaged and to make sure that they get the necessary letter of indemnity relating to their interest in the property and the insurance attaching.

For Hibernian policies the customer discount is on your car insurance & not your home insurance. Have you checked that cover is like for like from all your quotes, dont forget extras like accidental damage, all risks cover etc... their generally not included in your basic quote.

Just wondering, if the broker automatically renewed the policy without checking with the customer whether there were any material changes which had to be declared, and if there were changes, could the insurance company refuse payment in the case of a claim?
Not wishing to alarm anyone, but it's just a thought?!

I would assume that the onus is ultimately on the policyholder to notify the underwriter of any relevant changes in circumstances that might affect cover etc. regardless of whether or not there is a broker in the loop.

If the broker accepted payment for a service without performing his duties, he could be deemed liable for any deficit in cover. Trying to recoup that difference may not be fun though!

Regs state that you must receive your renewal notice 15 days before the date. However the key thing here is that you said that you took your insurance out through your mortgage broker - they may be a tied agent i.e. only deal with Hibernian for home insurance. And as your mortgage is conditional to having house insurance, they would have been obliged to maintain buildings insurance despite the lack of an instruction from you to renew.

That said you can cancel your policy at any time and take it out elsewhere, making sure to note the interest of your bank!

That regulation about 15 days only applies to motor insurance not household.

peteb said:

And as your mortgage is conditional to having house insurance, they would have been obliged to maintain buildings insurance despite the lack of an instruction from you to renew.

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Absolutely not true. The broker has no responsibility - or entitlement - to ensure you remain insured: it is the explicit responsibility of the householder to maintain insurance.

It sounds to me as though the correspondence address for the insurance policy was the brokerage and that they therefore automatically renewed it, to safeguard their commission, and on the basis that most people's inertia leads them to accept that without question.

To the OP: if the price is uncompetitive, I don't see that you are under any obligation to accept it, unless the broker can provide proof of authorisation (e.g. e-mail records, small print on any agreement you signed with them). Whatever you choose to do, just make sure your lender is noted as having an interest in the property on any insurance policy, and that they are notified of the insurer - otherwise you'll get a snippy letter from your lender about the terms and conditions of your loan requiring insurance to be maintained. [Why yes, this is the voice of experience... ]

@ SeanA:

No longer true. THe Non-Life Insurance Regulations 2007 which were signed on 22nd February 2007 extend the 15 working day notice to other personal and commercial insurance policies, including household.

At the time the OP had his renewal though - they didn't apply!

This hasn't come into effect yet and as far as I hear it isn't effective till later this year even though it was signed on the 22/02.

Dreamerb said:

Absolutely not true. The broker has no responsibility - or entitlement - to ensure you remain insured: it is the explicit responsibility of the householder to maintain insurance.

It sounds to me as though the correspondence address for the insurance policy was the brokerage and that they therefore automatically renewed it, to safeguard their commission, and on the basis that most people's inertia leads them to accept that without question.

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Insurance companies always send renewals to the brokers office, it is then the duty of the broker to inform the client of the renewal terms. The client has a contract dealing with the broker, not the insurance company directly.
Brokers are also obliged under regulations to provide the best quote for they're client so brokers will shop around for the best price on behalf of their client.

Yes but this a mortgage broker we are talking about here and not an insurance broker. And he would be acting in the best interest of both parties to maintain cover if no renewal instruction was given!!! Thats is if the renewal notice was really went out!

I really should update on this.

I went back to the mortgage/insurance broker (they do both), and basically said that the cover they had automatically renewed was too expensive and did not include my hearing aids. They apologised for the automatic renewal - said they had overlooked our papers or something along those lines.

I went direct to Allianz instead and got a better deal. No quibble from the broker. Not entirely sure who I was insured with in the interim, but just glad nothing happened to test it!