Hastings Direct has been fined GBP735,000 by the FSA (Financial Services Authority) for treating its customers unfairly. The car insurance company was found to have cancelled over 4,500 policies following a pricing error.
The problem was caused by the Hastings Direct car insurance quotation system, which generated quotes that were lower than the market rate. The insurer then decided to cancel these policies, a step that was not acceptable according to the FSA.
Although a cancellation clause was included within the policies the FSA felt that Hastings Direct should have considered other options first rather than invoking the cancellations. They believe that it is not acceptable to cancel cover because of what is simply a pricing error.
The view of Swinton, the biggest insurance broker on the high street, is that drivers with six points plus on their licence will soon be the norm, categorised as standard.
With the advent of the speed camera and the often scandalously low speeds at which they are set to trigger, Swinton feel it is not right to automatically penalise drivers because of these points. Bearing in mind the fact that approximately six million drivers have points on their licence, which is over ten percent of the whole population of the country, the approach from the insurer seems a very fair and sensible one.
Swinton are taking the view that the driver with six points on their licence today is as safe as the one who had three points five years ago and no points ten years ago. We just hope other insurers follow suit.
Technology is not always right is the message being sent out by car insurance companies such as Direct Line, suggesting drivers should not take the advice of the system blindly.
There have been many occasions when drivers have followed the route given to them by a sat-nav system only to find themselves heading down narrow farm tracks and through deep water. They carry on regardless though feeling that the satellite navigation system cannot be wrong. A big mistake say Direct Line since they have seen an increase in claims because of situations just like these.
If the situation continues then car insurance premiums are sure to rise, a scenario no one wants to see. Direct Line and other car insurance providers have to increase the premiums because of the extra costs they face so it is down to the drivers to make sure they use sat nav as an aid, trusting their own driving knowledge first and foremost.