13 Oct, 2011 @ 09:14
1 min read

Car insurance renewal rage by expats in Spain

By James Bryce

AN expat has warned drivers to beware of the ‘sharp practices’ used by insurance firms after he was left hundreds of euros out of pocket.

Roger Jennings, 63, from Benajarafe, had 700 euros taken from his account after his bank La Caixa automatically renewed his car insurance and upped the premium by 100 euros without his permission.

Most alarming of all, the tactic is apparently legal, with the onus on the customer to inform the insurance company two months before the end of the policy if they do not wish to renew.

Jennings, who runs a bookshop in Torre del Mar, told the Olive Press: “I am really annoyed about it and want to raise awareness of what can happen so that others don’t have the same problem.”

The father-of-two – whose policy was taken out with his bank – only became aware of the situation when his branch sent him a green card, required for driving his Spanish-registered car abroad.

But despite informing the bank that he had received a cheaper quote elsewhere and would not be renewing his policy, the bank withdrew the money anyway.

The money was eventually repaid after five weeks, minus a four euro charge, with Jennings now seeking compensation for the time the bank had his money.

“It’s only four euros but it’s a point of principle,” said Jennings, who has lived in Spain for over 20 years.

“I’ve filed an official compensation claim and am now waiting for a response, although the Oficina de Consumo told me the insurance company is acting within its rights.

“I was a customer with La Caixa for 22 years but I’ve gone elsewhere now. They blew it because of bad customer service.”

Car registration expert Paul Ripley was also surprised at the action. He said: “I wasn’t aware that insurance firms were allowed to do that.“It seems a bit cheeky if it is legal.”

Wendy Williams

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  1. I recently changed one of my Spanish insurance policy because of unjustified ever increasing premiums. But of course they always craftily wait until the two month period is live before presenting their quote for that year.

    So, to make sure no monies were taken from my account by the previous company I raised an ‘orden de baja’. It didn’t go down too well but at least I made my point.

    I’m surprised the ‘car registration expert’ wasn’t aware of the custom.

  2. “the Oficina de Consumo told me the insurance company is acting within its rights.”

    The customer is always wrong in Spain, even the ombudsman doesn’t support the customer lol.

  3. Once you have given your bank account details out in Spain you are almost granting universal permission to have your accounts robbed blind, of course you don’t even have to give your details out in some cases as Spanish banks seem to have no qualms about giving your account details out to all and sundry. The EU should have normalised a lot of regulations before they embarked on their single currency farce, I can think of quite a few things, consumer protection, criminal law, traffic law, opening up the service sector, language (arguably the first thing they should have done) I’m ranting sorry! I’m going.

  4. It is always a good idea to get at least half a dozen bank accounts going in Spain. Then, when one company starts employing underhand tactics (you know, like billing you for cancelled services, billing you for non-existent services, and all the other mad things Spanish companies do as standard etc) then just cancel the account. Madness to have to resort to such things, but that is how this country is run unfortunately. You might lose a payment, but it’s better than having your savings continually raided. As Peter said, it is very risky giving out bank details in Spain.

  5. Reading the story about Mr. Jennings I’m in a similar position,I was with this broker in Javea and wanted to swap cover to my new car;they said the best way was to start afresh with a new policy,wich they did.They issued me with a cover note for 15days which expired before the new documents arrived so I asked for a further covernote;the clerk in the brokers became very rude and told me I would be OK!In Spain?!With the Guardia!!The docs. came eventually,then right near the end of the insurance period I found better cover.NEVER ONCE did they ring,correspond,or otherwise,NEVER was I advised about 2 months cancellation,they have been extremely lax in everything.They are now getting nasty and have sent a letter NOW! informing me about the compulsory? 2 months previous renewal clause.I would be interested in other readers’ comments/advice thank you.

  6. A salutary lesson in research. The two month rule is one that the insurance (and other) sectors use to lock in unwary clients. If your broker failed to advise you and manage your account correctly, perhaps you should consider using the complaint form upon the receipt of which the ayuntamiento have to act. Their sending of a ‘nasty’ letter suggests that they have recognised that they could be on unsafe terreno. However, if it was YOU that found better cover without consulting the broker, then perhaps you have learned a costly lesson.

  7. In reply to amparo as you may gather from my previouse letter the broker in my opinion has been derelict in his duty.The broker is operating a bussiness,a service,it surely must be his duty even obligation to alert me to keep me up-to-date with what is going on.I customer,he broker,I pay money for service,he take!!The thing is I contend is he has given me NO service;he has sat on his *rse and done absolutely zero.He only decided to go for the money a week or so AFTER the new cover was due to start,naturally I cacelled the debit at my bank.Bearing in mind had I NOT sought new insurance yet again I would have been left without documents for the second time.I see absolutely no case for him at all.I would still welcome comment/reply from amparo and/or others thank you.

  8. ***Norman***. I’m not entirely sure I can understand your comment. If you are 100% convinced your broker has been negligent (HOWEVER, negligence in Spain does NOT include the absence of proactive advice unless such pro-activity is specifically contracted), your only option is to complete the complaints form which your broker is legally obliged to provide. The ayuntamiento will then proceed as they see fit, which may or may not be to your satisfaction.

    You may well have cancelled your direct debit but unless you obtain written and signed confirmation that the cover was cancelled you may find an embargo landing on your doorstep.

    Personally and regrettably, I think you are on a hiding to nothing. An expensive lesson.

  9. This is a mickey mouse country,AND they can do what THEY LIKE!!!!!!!since they got into the EU they think they have hit the bright lights , AND, after numerous complaints (from me)to the EU LOT ,guess who side they are on!! Someone must have their hand in the till!!! I HAVE GOTTA GET OUTA THIS PLACE!!!!!

  10. I’m surprised that you all did’nt know that the 2 month rule is a fact of life in most if not all mainland countries.

    When we moved to France and opened a bank account with Bank Populaire and took out house insurance, obligatory when renting or having a mortgage, the 2 month rule was made very clear to us.
    Same goes for cancelling contracts with telephone companies etc. So, it is a general rule.

  11. ***Brian Thurlborn***. If you think this is a “Mickey Mouse” country perhaps you should familiarise yourself with more of the British press (assuming you are English). Get yourself a copy of (for example) Private Eye or, if you really feel homesick, The Daily Mail.

    Maybe you came here thinking it was the land of milk and honey and then came to the stark realization that you get out that which you put in.

    Hasta nunca.

  12. Just briefly,is there any duty here in Spain for businesses to act in a certain way,is the customer NEVER right?If they wish you to give 2 months notice,they surely have an absolute duty to inform you PRIOR to that time of any impending changes e.g. premium increas , change in cover etc..To me they have ABSOLUTELY no right to think they can go into your bank account to access a direct debit without informing you about changes in premiums etc..I might add a direct debit does NOT constitute a contract.Finaly Amparo,I AGREE with Mr.Thurlborn this country just wants to hold its hand out and take money and give no service.Problem with Spain is everyone in business think THEY are doing you a favour when we know it’s the other way round.

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