Aren’t meerkats cute. Compare the Market has some cute tricks too. Picture: Supplied

SEVEN of the 10 car insurance brands on Compare the Market are from its parent company. Meanwhile, insurers are sneakily slugging customers with double-whammies.

Cover providers are secretly raising underlying premiums at the same time as reducing no-claim discounts.

Incredibly, some insurers even ratchet up charges when a policyholder submits a claim then withdraws it.

News Corp today exposes the insurers doing this and that the industry faces a review by the corporate regulator which is concerned about poor or non-existent disclosure of these hidden hits.

An investigation by News Corp Australia reveals customers of at least three popular insurance brands can face a premium increase and a reduction in their no-claim discount when they make an at-fault claim.

Customers of Coles car insurance, as well as other providers, face a premium increase and a reduction in their no-claim discount when they make an at-fault claim. Picture: SuppliedSource:Supplied

For example, a customer who had a 60 per cent no-claim discount on a $2000 annual premium — meaning they were actually paying $800 — could see their premium jump to $2200 and have their no-claim discount slashed to 40 per cent, leaving them to pay $1320.

The brands doing this are Coles and RACV — both run by industry giant IAG, or Insurance Australia Group — as well as third-ranked Allianz.

What’s more, these brands, plus Youi and Real, sometimes hit customers who make a no-fault claim with a premium hike even if the no-claim discount is unchanged.

RACV and Youi customers can even be stung when they submit a claim but then withdraw it because, for example, the excess is more than the repair bill.

An IAG spokeswoman said: “There are a number of factors that impact a customer’s insurance premium, including a customer’s claim history. However the way we use this information varies across our brands.

“We have a project underway reviewing (RACV) no claim discounts and incident loading,” the spokeswoman said.

A Youi spokesman said: “Any incident the customer discloses will affect the premium.”

It may be that GIO and AAMI customers face similar secret slugs. Their parent company, Suncorp, failed to respond to questions, as did BudgetDirect and Progressive.

These devilish details have raised the ire of the Australian Securities and Investments Commission, which last year said “no-claim discount schemes do not operate in the way consumers might reasonably expect”. It did not name any insurer. News Corp Australia has done so after putting ASIC’s concerns to cover providers.

ASIC recommended that insurers should “implement measures that will meaningfully improve consumers’ understanding of these schemes”, threatening regulatory action if they didn’t.

An ASIC spokeswoman told News Corp Australia it intended to conduct a “review to assess the adoption of our recommendations”.

PUSHING IN-HOUSE PRODUCT

The majority of car insurance brands “compared” on a popular comparison website are sold by the site’s parent company. And it is not the only one pushing in-house product.

Seven of the 10 car insurance brands on Compare the Market come from Auto & General Services Pty Ltd. Both Compare the Market and Auto & General are ultimately owned by Budget Holdings Limited. Three of the five home insurance brands on Compare the Market are also arranged by Auto & General.

At rival comparison site Choosi, only two home insurance brands are compared — and one of them, Real, is owned by Choosi’s parent, Greenstone Limited. Real is one of the five car insurance brands compared by Choosi.

Neither compares any product from GIO, AAMI, NRMA, RACV, SGIC, SGIO, Allianz or QBE.

As revealed by News Corp Australia yesterday, parliamentary powerbroker Nick Xenophon wants the Senate Economics Committee to recommend how a government-run comparison site could be set up to make it easier for consumers to properly compare the market.

The Insurance Council of Australia yesterday said “a government-run insurance price comparison website was unnecessary, and it would seek a meeting with Senator Nick Xenophon to explain insurance pricing and competition”.

Meanwhile, more than 8000 households joined a new campaign seeking a group-discount on home and car cover from a major insurer. The Big Insurance Switch began yesterday with the goal of gathering at least 30,000 supporters in three weeks.

Go to www.onebigswitch.com.au for more information.

There is no obligation to take up any offer. News Corp Australia and One Big Switch will earn a commission from any accepted deals. News Corp is a shareholder of One Big Switch.