BD
Brad D
1 reviews | Active since Aug 2016
12 Aug 2016, 08:34
Overcharging
<p>Yesterday I received an sms relating to insurance provided by an organization I have a subscription to. I decided to test where I was in terms of value for money with my current service provider- Outsurance. The other insurance company turned out to be Auto and General. I pulled up my policy documents and asked for a like for like quote based on the criteria set out in my current insurance for the building insurance as well as for my car.</p> <p> </p> <p>Auto and General quoted me R1202 for my car versus R1631 from Outsurance- this was not too much of a surprise as I have had some heavy claims (including the theft and recovery of the mother vehicle in question) so I cant really begrudge Outsurance charging me a bit on top based on this. I did also disclose my complete claim history to Auto and General so they were aware of this. No far no issue then.</p> <p> </p> <p>The real shock came with the building insurance. Auto and General offered me R619 per month to cover the house based on exactly the same criteria as Outsurance. Why I was shocked was because Outsurance charges me R23 337 annually for exactly the same coverage. Why this rate is annual is via their relationship with my bondholder FNB- who OUTsurance pay the annual subscription to and who in turn then charge me monthly (with an mark up of R80) meaning that I pay R2025 per month via my bond. So the difference in what I pay, excluding FNBs mark up, is R1326 per month. At this point alarm bells started to ring and so I decided to contact OUTsurance and chat to them about it. I dealt with a fantastic lady by the name of Nolo who offered to look into the matter once I had sent her the quote from Auto and General. Not 15 minutes later, I received an email confirming that the cover from my house would now cost me R6633 per annum! Which is R553 per month! An incredible saving of R1391 per month for exactly the same cover.</p> <p> </p> <p>Im stunned how I can get over a 70% decrease in my premium for the same cover. Ive covered this property with Outsurance since September 2011 so have I been paying 70% more than I should have for almost the last 5 years? I feel really stupid for not checking a long time ago!</p> <p> </p> <p>The reason I covered my house with Outsurance was because FNB basically told me that the house coverage with OUTsurance was a condition of granting me and my wife the bond. We were also advised that this deal would include no outbonus. At the time the premium seemed excessive, however my interest rate with FNB was marginally better than the other banks so I elected to accept the deal. Looking back now, I feel that FNB and Outsurance (who have a business relationship) took advantage of the situation and charged excessively high premiums. My trust in both these institutions – more especially OUTsurance has been broken. Under the circumstances I cannot see how I can deal with a company that so brazenly overcharge a loyal customer.</p>
Helpful (0)
Replies (3)0
Replies (3)
OUTsurance's replyOfficial
17 Aug 2016, 13:43Thank you for your comprehensive yet concerning feedback which was referred to our client care manager for urgent feedback.
Our client care manager, Vernon contacted you and the discount subsequently allocated was discussed in more detail.
The detail hereof will be sent to you via e-mail as well.
Regards
Dinky
Best regards,
OUTsurance's reply17 Aug 2016, 13:43
Official
Thank you for your comprehensive yet concerning feedback which was referred to our client care manager for urgent feedback.
Our client care manager, Vernon contacted you and the discount subsequently allocated was discussed in more detail.
The detail hereof will be sent to you via e-mail as well.
Regards
Dinky
Best regards,
BD
Brad D's updateReviewer Update
17 Aug 2016, 13:52Thank you Dinky for your reply. I confirm Vernon contacted me and I await the written response before commenting further. If the email confirms what he said over the phone then rest assured I will have a lot more to say on this issue.
BD
Brad D's update17 Aug 2016, 13:52
Reviewer Update
Thank you Dinky for your reply. I confirm Vernon contacted me and I await the written response before commenting further. If the email confirms what he said over the phone then rest assured I will have a lot more to say on this issue.
BD
Brad D's updateReviewer Update
02 Sept 2016, 10:09So I have finally received the long awaited email from Vernon. In my converstaions with him I stated my case and advised him Outsurance should make this matter right. The bottom line is outsurnace feels that they were totally justfied in their actions, no refund for years of overcharging would be forthcoming here is what Veron said:
I referred your query further to management and unfortunately we will not be backdating changes made to your premiums now to all the other previous years.
With that said we will also not be backdating refunds on your facility number noted above on the subject line.
The reduction of premiums is merely a retention tool we have internally and is purely based on individual client profile and this was also discussed with you by one of our Retention advisors.
Should you need further assistance do not hesitate to drop me a mail and I will gladly assist you, alternatively contact OUTsurance directly and a friendly advisor will kindly assist you.
Thank you for your time and understanding
This prompted me to then have a detailed look at my relationship with them. This started on December 2007 on a previous property which was sold in 2011. As mentioned in my previous post, I again used FNB for my bond on the new property and here is where the problems started. I was told that the house insurance would be with Outsurance and this was a condition of the deal (this process is known as “bundling” and is now outlawed under the consumer protection act) Thus I had no choice as a consumer, and had to take the Outsurance policy.
A review of my cover on the first house reveals a reasonably good value for money offer, with the annual premium averaging 0.31% of the sum insured. Then when I bought my new house and was forced to use to have my insurance bundled into my bond (outsurance/FNB) there was 2 month period (October to November 2011) where the coverage was at 0.44% of sum insured and thereafter (December 2011) this went up to 0.62% of sum insured.
In other words, they only pushed the premium up enough so as not to scare me away and get the deal done, then on the first opportunity that presented itself(the new financial year) they then took advantage and basically doubled the cost of the cover. As a customer I had no choice but to accept this as if I didn’t then I would have to move my bond to another bank to get out of the deal, the costs of doing this is obviously high- outsurance/FNB knew this of course. The concept of fair value does not seem to be a concern for them.
OUTsurance and FNB’s actions have thus resulted in me being overcharged by over R60 000 rand since December 2011.
The joke all this is the new premium I’m being charged is now 0.16% of the sum insured! The annual premium is thus half that of what I was paying in 2007! (My annual premium was dropped from R23 337 to R6495) They must really want to keep my business because in 2007 they were insuring a building for R1.82 million and today they are insuring one for R4.1 million, yet effectively charging me half of what I was paying in 2007! How do these people do business!
Ive taken the time to share my experience because I do believe there are many other outsurance/FNB customers out there who have been overcharged in the same way. At some point since I signed up, FNB stopped forcing customers into taking their house insurance to outsurance, however FNB never took the time to advise them they now in fact could choose a insurance provider of their choice. In fact FNB still mention outsurance on their statements to customers- mentioning that if you insure with outsurance there is no need to send proof of coverage. Companies such as these ones rely on consumer complacency and they clearly make a lot of money out of it!
A final note on this sorry saga, I’ve just checked my debit order for my bond and yes my premium has not been adjusted, so I’m still being overcharged. I suppose this level of service is what you get when you insure with outsurance. Buyer beware!!
BD
Brad D's update02 Sept 2016, 10:09
Reviewer Update
So I have finally received the long awaited email from Vernon. In my converstaions with him I stated my case and advised him Outsurance should make this matter right. The bottom line is outsurnace feels that they were totally justfied in their actions, no refund for years of overcharging would be forthcoming here is what Veron said:
I referred your query further to management and unfortunately we will not be backdating changes made to your premiums now to all the other previous years.
With that said we will also not be backdating refunds on your facility number noted above on the subject line.
The reduction of premiums is merely a retention tool we have internally and is purely based on individual client profile and this was also discussed with you by one of our Retention advisors.
Should you need further assistance do not hesitate to drop me a mail and I will gladly assist you, alternatively contact OUTsurance directly and a friendly advisor will kindly assist you.
Thank you for your time and understanding
This prompted me to then have a detailed look at my relationship with them. This started on December 2007 on a previous property which was sold in 2011. As mentioned in my previous post, I again used FNB for my bond on the new property and here is where the problems started. I was told that the house insurance would be with Outsurance and this was a condition of the deal (this process is known as “bundling” and is now outlawed under the consumer protection act) Thus I had no choice as a consumer, and had to take the Outsurance policy.
A review of my cover on the first house reveals a reasonably good value for money offer, with the annual premium averaging 0.31% of the sum insured. Then when I bought my new house and was forced to use to have my insurance bundled into my bond (outsurance/FNB) there was 2 month period (October to November 2011) where the coverage was at 0.44% of sum insured and thereafter (December 2011) this went up to 0.62% of sum insured.
In other words, they only pushed the premium up enough so as not to scare me away and get the deal done, then on the first opportunity that presented itself(the new financial year) they then took advantage and basically doubled the cost of the cover. As a customer I had no choice but to accept this as if I didn’t then I would have to move my bond to another bank to get out of the deal, the costs of doing this is obviously high- outsurance/FNB knew this of course. The concept of fair value does not seem to be a concern for them.
OUTsurance and FNB’s actions have thus resulted in me being overcharged by over R60 000 rand since December 2011.
The joke all this is the new premium I’m being charged is now 0.16% of the sum insured! The annual premium is thus half that of what I was paying in 2007! (My annual premium was dropped from R23 337 to R6495) They must really want to keep my business because in 2007 they were insuring a building for R1.82 million and today they are insuring one for R4.1 million, yet effectively charging me half of what I was paying in 2007! How do these people do business!
Ive taken the time to share my experience because I do believe there are many other outsurance/FNB customers out there who have been overcharged in the same way. At some point since I signed up, FNB stopped forcing customers into taking their house insurance to outsurance, however FNB never took the time to advise them they now in fact could choose a insurance provider of their choice. In fact FNB still mention outsurance on their statements to customers- mentioning that if you insure with outsurance there is no need to send proof of coverage. Companies such as these ones rely on consumer complacency and they clearly make a lot of money out of it!
A final note on this sorry saga, I’ve just checked my debit order for my bond and yes my premium has not been adjusted, so I’m still being overcharged. I suppose this level of service is what you get when you insure with outsurance. Buyer beware!!