Following our recent video on “Unbreakable bundles” https://youtu.be/eS_7SLf8lWU on the 14th of March; we have already received a number of queries from brokers concerning the renewal of add-on insurance. We hope the information below will be helpful to anyone involved in renewals at the moment.
Q & As about renewing add-on insurances
See Annex B PS15/22 http://www.fca.org.uk/static/fca/documents/policy-statements/policy-statement-15-22-general-insurance-add-ons.pdf
The Insured made a conscious decision the previous year to opt-in for an add-on, what happens now?
Where the add-on was originally purchased on or before 31 March 2016, and renewal is invited on substantially the same terms, the broker can automatically assume that the insured wishes to renew the add- on provided that they take reasonable steps to inform the customer that the renewal of the product is optional and that the customer can decide not to renew the product.
The customer must also be told of the effect of any non-renewal.
(The onus is on the customer to inform the broker if they don’t wish to renew)
The Insured had additional covers alongside his Home buildings insurance policy that had been provided on an opt-out basis previously. While not exercising his right to opt-out he had not made an active decision to buy the cover in the past, what do I need to do?
Where a customer has not previously made an informed decision to select the add-on, the broker must obtain the insured's informed consent to renew cover.
The customer must also be told of the effect of any non-renewal. (The onus is on the broker to obtain active consent from the insured to renew).
The Insured had it as a mandatory cover but may want to have it taken out of the policy, how does this work?
Where covers are "bundled" or built-into a wrapper of products and there is no optionality – i.e. the customer buys and pays for the whole bundle or nothing at all, the rules about obtaining consent for each component within a bundle do not apply.
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