Hundreds of drivers overcharged on their Axa motor insurance due refunds

The overcharging blunder goes back a number of years and relates to the failure of Axa Insurance to recognise the likes of no-claims bonuses for ­policy-holders. The company said 400 customers had been affected.

It is just the latest overcharging issue to hit consumers in this country. Banks, energy providers and telecoms companies have been forced to apologise and pay refunds to customers lately.

One Axa customer said: “I got this letter from Axa this week to say I had been overcharged €391 on my policy which they are now refunding.

“When I called to ask what happened, it turns out it was a historical overcharging dating back to 2020 involving various amounts from €83 to €91 annually.

“When I asked why, they put it down to a ‘system glitch’… not human error.

“I wouldn’t mind but I always ring up when I get my policy renewal quote and it seemed very high in the past few years and they weren’t budging on it.”

In a letter sent to one customer who was overcharged, the insurer admits a charge had been incorrectly applied for a benefit on the policy called “Lifetime Protected No-Claims Bonus”.

Instead of lowering the premium to reflect the lifetime no-claims bonus, it appears a charge was imposed on the policy for this by Axa. The error has since been corrected.

The letter adds: “We want to assure you that this has no impact on your policy cover. Plus, you do not need to do anything as no further action is required.”

Axa Insurance said it had identified what it called a historical systems-based error in February this year that affected around 400 motor customers.

“In March 2024 we wrote to each of the impacted customers apologising for the error and confirming that a refund was being processed (which also included a compensatory payment) and would be paid in the coming days,” it said.

Axa said the average refund amount was €163. It insisted that the systems error had been resolved.

“Axa is fully focused on our customers and takes such matters incredibly seriously. We are fully committed to ­resolving any issue impacting our ­customers – we apologise, fix the issue and repay and compensate the customer as quickly as we can.”

The insurance industry has faced overcharging claims in the past.

Consumer advocates argue that ­insurance customers across all insurers have been overcharged for years, with the Central Bank saying they have been engaged in the since-banned practice of “price-walking” – where loyal customers are charged higher premiums every year if they fail to move providers or challenge the renewal quote from their existing provider.

Central Bank research found that customers who stayed with their insurance provider for nine years or more were paying on average 14pc more for car insurance and 32pc more for home insurance.

But the regulator has now introduced regulations that mean insurers can no longer add arbitrary costs to existing customers.