Dear Consumer’s Voice
I had car insurance from a particular company since April 2007. It was recently due to be renewed and my broker contacted me and told me that the premium had more than doubled from P3,600 to P7,392. This was even though I did not claim during the previous cover period. When I asked them why it was increasing so much they told me that it was because the rate that they used in the previous year was given to certain brokers as preferential rates. Now that discount isn’t available any more and they have to give me the normal rates.
What can I do? Should I accept this new rate or not?
This is very strange. I can understand how an insurance company would give a broker a preferential rate to help them get business but to give them THAT level of discount is astounding. Can they really afford to give a 50% discount? I think not. I suspect that your broker made a mistake last year and is trying to recover from it this year.
What you must do is simple. Don’t sign any new cover agreement with them until you have shopped around. Talk to other brokers and see if they can come up with another good deal with you. Tell every broker what the others have offered you and see if they can beat it. Only if this fails to get you a decent price should you go back to your original broker and take that deal. If you do go back to them ask them to put in writing why it has gone up so much. Then perhaps talk to the insurance company and see if what you are being told is true because it’s all very suspicious.
The lesson is simple. You have the right to shop around so get on your bike and get to it!