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By Cliff D'Arcy
Ever hear of fraudster Emil Savundra, his Fire, Auto & Marine Insurance Company (FAMIC), and his famous trial by television' at the hands of David Frost? These events took place in 1967, so few people under the age of forty will be familiar with this scandal. Insurance fraud on a grand scale "Dr" Savundra was a born swindler who committed fraud in several countries. In 1963, he founded insurance company FAMIC, which offered extremely competitive premiums to British motorists. Alas, FAMIC's insurance policies turned out to be worthless, as it was all-but-impossible to make a successful claim. In 1967, Savundra shot himself in the foot by describing policyholders as peasants' on BBC Television chat show The Frost Programme and claiming that he was not responsible for problems at FAMIC. He was imprisoned a year later. The collapse of FAMIC left 400,000 motorists without insurance cover. Thus, 41 years later, there is still a slight spike in motor-insurance renewals around the anniversary of FAMIC's failure. One con that goes on Of course, the insurance industry is far better regulated today than it was forty years ago, thanks to the creation of the Financial Services Authority. Nevertheless, many insurers still view their customers as sheep waiting to be fleeced. The most common trick is to favour new customers, while giving loyal policyholders a raw deal. For example, a month ago, in The Easiest Car-Insurance Trick, I wrote about my wife's renewal quote for her motor insurance. Her insurer casually jacked up her premium by 10% from £274 to £302. According to The AA's British Insurance Premium Index, car-insurance premiums have gone up by an average of 6% over the past year. Therefore, my wife telephoned her insurer to query this above-average premium hike. Predictably, it backed down. In order to keep her custom, it offered to increase her premium by a mere £1, or 0.5%. That's more like it. Clearly, my previous article struck a chord with Fool readers, as I had a flood of feedback... What you told us about car insurance Readers are particularly annoyed when insurers try it on'. We don't like the assumptive' approach used by insurance companies. This is along the lines of: "We will automatically renew your policy with this higher premium, unless you cancel beforehand." For example:
My thanks go to these (and many other) Fool readers who contacted me with feedback on their experiences of tracking down lower insurance premiums. In summary, if you don't want to be taken for a ride, begin shopping around as soon as your renewal notice arrives. Once you've done so, go back to your existing insurer in order to give it the chance to match your best quote. As always, if you don't ask, you don't get! More: Find quality quotes for car insurance | The Quest For Cheap Car Insurance | Don't Fall For These Car Insurance Tricks Useful links:
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