We all know how difficult it can be to find the right insurance policy. There is a lot to be made from commission and companies will jostle each other for your custom. No matter how carefully you read through the small print your policy can still turn out to be a disappointment when you do need to make a claim.
However, insurance is something that we have no alternative but to take. You cannot do without car or home insurance and no matter how frustrating and expensive, finding the right insurance is perhaps one of the most important financial decisions you make.
But now there is another hazard to be aware of. As the banks in Spain have seen income drop from mortgages and other high return activities, they’ve been looking for new ways of boosting their income. And they seem to have found it – home insurance.
No account is sacred
Some banks are taking a good look at your Spanish insurance arrangements even though they are not allowed to use your personal data from your Spanish bank account.
They are checking the premiums you pay, who the insurance company is and when the renewal day is approaching. Then perhaps a ‘problem’ occurs with your direct debit, a payment isn’t made and the bank calls you in.
At this point they take the opportunity of introducing you to their own insurance. They will suggest that you might like to take up a particularly good, promotional offer. Of course, it will be a cheaper premium than you have been paying. After all, they know what that is already.
Don’t be deceived
Not only is this practice highly unprofessional, you also risk being sold an inferior insurance policy. Knowing what your premium is, the bank will undercut the cost of your current insurance and offer you something cheaper. What they may not inform you about is the difference in the actual level of insurance they are offering for this price. It is highly likely that it is not only cheaper but inferior in some form too.
What should you do?
You might try to establish as clearly as possible the reason why your direct debit was not paid. You could also ask whether the bank has used information from your account. Although they are unlikely to admit that they have.
You need to rectify the missed payment. It is likely that your insurance company in Spain will request it from your bank again. However, it might be wise to be cautious and contact them yourself. You can explain the situation and ensure that payments continue to be made.
Advice for financial institutions
A well-known insurance company in Spain has published the following advice. We think it’s worth following.
Financial institutions (banks and others)
—⫸ Cannot require you to purchase any type of insurance with them. If they do, ask them to put this in writing
—⫸ Even if you have a loan or a mortgage, unless stated in the mortgage deeds, you do not have to purchase your insurance with the bank and can choose your insurance provider
—⫸ You have the right to cancel the bank’s insurance if you wish, they should not put pressure on you to retain it
—⫸ If they refuse to cancel your insurance ask for a sheet of ‘Order of non payment’ for you to sign
—⫸ If even after you have told the bank you want to cancel your insurance with them you are still charged the premium, you should ask them in writing to:
—⫸ Return the receipt
—⫸ Refund your payment
—⫸ Stamp a copy for you to keep
If you discover that your bank has been using your personal data – complain
Written by caroline clinton