Equity Red Star

...time I started insuring with Equity Red Star (not sure exactly when but sometime around the mid 1990’s), however, I was actually more concerned about the level of service I could expect from the insurers in the event of needing to make a claim. I was fortunate enough to be buying a brand new car, so I needed comprehensive insurance before I dared to drive it off the garage forecourt. I was guided towards a policy to suit my needs by a salesman at ...
...I renewed my insurance with Equity Red Star (via the car dealership acting as an intermediary) for many successive years, despite a number of resolutions to do some shopping around another year! Two factors contributed to this: the renewal invitations always seemed to arrive at busy times; and I had the convenience of a direct debit arrangement that guaranteed continuity of cover (if I did nothing).

Looking back through my records ... more

When it comes to choosing a car insurer, it’s not easy being an individual consumer. There may be plenty of organisations willing to help, but how can you be sure their recommendations are based on your criteria? Where are the league tables to help us analyse their relative performance on aspects of service of interest to us such as promptness of payment in the event of a claim? The advertisements for leading brands may leave very memorable impressions but they are short on hard factual data and the plethora of brokers and intermediaries vying for business add another layer to the decision-making.

There was a time when each year I would seek out the insurer with the lowest quote to fulfil my minimal legal obligations. With the misplaced confidence of youth, I did not expect to make a claim, so minimising the cost of the premium and building up my no-claims discount entitlement were my only concerns. That was before I had an accident or two. Many brokers and intermediaries seem to assume these are still the only concerns of their customers.

By the time I started insuring with Equity Red Star (not sure exactly when but sometime around the mid 1990’s), however, I was actually more concerned about the level of service I could expect from the insurers in the event of needing to make a claim. I was fortunate enough to be buying a brand new car, so I needed comprehensive insurance before I dared to drive it off the garage forecourt. I was guided towards a policy to suit my needs by a salesman at the car dealership. I knew that it was not the cheapest insurance I could get but I wanted an established firm with a good track record and a key point of interest for me was the implied “special relationship” between the car dealer and the insurer that I thought would make things easier in the event of needing to make a claim.

I renewed my insurance with Equity Red Star (via the car dealership acting as an intermediary) for many successive years, despite a number of resolutions to do some shopping around another year! Two factors contributed to this: the renewal invitations always seemed to arrive at busy times; and I had the convenience of a direct debit arrangement that guaranteed continuity of cover (if I did nothing).

Looking back through my records I recall that the first claim I made to Equity Red Star was handled very satisfactorily. It is surprising just how much damage can be done by reversing into a lamp-post! I was pleased to discover that comprehensive really did mean comprehensive and that the car dealership and insurer worked well together to provide me with an insured substitute car for a few days while the work was carried out. Repair payments were made directly by the insurance company to the repairers and I felt happy that my insurance was in good hands.

After a second mishap reversing, this time into a parked vehicle, again I found the service I received when I reported the incident quite satisfactory. As no damage had been done to my car, the paperwork was minimal. I received prompt acknowledgement explaining that they would need to keep the file open in case the other party made a claim. I never heard anything more.

Over the years I found that requests for minor changes to the policy were efficiently handled. E.g. change of employment status, change of vehicle, allowing additional named drivers and changing the location at which the car was kept for a period.

Sadly my happy experiences of service from Equity Red Star came to an end earlier this year. My dissatisfaction arose over what should have been a very simple claim: a replacement windscreen being fitted at my local garage. To my surprise I was requested to settle the bill myself and claim by sending the invoice to the insurer. Although I would have preferred direct payment, I was happy to do this by credit card with the understanding (confirmed by a telephone call to my insurers in advance of the work being started) that I would be reimbursed by the time the credit card bill arrived. To cut a long story short, I started chasing for payment at 6 weeks and was eventually paid only after 12 weeks had elapsed.

What concerned me most were the various half-explanations I received on the status of my claim. I was repeatedly assured that my claim had been in order but I was told that the payments had been outsourced to another organisation and so they “could not say when I would receive the money”. This did not stop another member of the same call centre later assuring me that I would receive payment “by the end of the week” (on a week when no payment subsequently arrived). I was also told that if I didn’t receive payment I would “have to take it up with the outsourcers myself as the outsourcers had been paid”. This was quickly retracted when I asked who the outsourcers were, underlining the point that I had no prior knowledge of or agreement with them.

All communication was at my instigation. I received no written communication from the insurers: no acknowledgement of my claim; no explanation for any delay in payment; not even an acknowledgement of my eventual letter of complaint. Payment eventually arrived in the form of a handwritten cheque from an organisation I can only presume to be “the outsourcers”. The accompanying note made no mention of Equity Red Star, and the only reference was to my car registration number which I felt was potentially insufficient to trace it to a particular claim.

I considered taking my complaint further but as my renewal was due I decided instead to vote with my feet. It seems to me that there is a basic principle involved in outsourcing. When an organisation outsources a function to another it must retain accountability to its customers. Equity Red Star, in my view, failed to do this.

The whole experience made me think quite carefully about the criteria that actually matter to me in my choice of car insurance. I needed to change my intermediary as well as the insurer. By shopping around I found an alternative insurer willing to insure my car at a cost of approx 60% that of my Equity Red Star insurance renewal. There were inevitably some differences in the details of cover but it was adequate for my needs, and I have to say that so far I have been impressed with the efficiency of the administration. Until such time as I have to make another claim, however, I cannot judge how my new insurers will measure up in all respects.

Until this year, I would have given Equity Red Star a four-star rating.
(For a fifth star they would have had to have been more price-competitive.)
This year in my estimation they have provided no more than a two-star service.
(To drop to one-star they would have to have refused to pay out.)
I am not usually quick to judge on the experience of a single episode and have therefore decided to give three stars overall, as I am sure they are not the only insurer experiencing problems with newly outsourced parts of their operations. As a consumer I would actually prefer to pay a little more for the service I used to enjoy.

For further information: Equity Red Star insurance is available through a number of different brokers and intermediaries including some online services such as Direct Choice. I have not commented on or rated these services as I have no direct experience of using them.
Equity Red Star Head Office is at Library House, New Road, Brentwood,Essex CM14 4GD

 

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