Crowded road to recovery
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Your support makes all the difference.DIRECT LINE, one of the UK's best-known insurers, is to take on the AA and RAC with the launch of its own road recovery arm, Direct Line Rescue.
It hopes to benefit from the dispute between the AA and RAC that followed the RAC's decision to sell its motoring organisation, a deal which will net pounds 35,000 for each of the 12,000 members of the RAC's Pall Mall club.
Direct Line hopes a decision to "personalise" quotes - or to charge customers according to age and post code - will help it undercut market leaders by as much as 50 per cent. It was "very pleased" with its first day of business, and had been selling policies at the rate of two every minute. It did not have to answer any call-outs yesterday - time will tell whether the insurer manages to meet its ambitious target of reaching customers within an average of 35 minutes.
It hopes pricing and marketing techniques learnt in the insurance market will give it an edge in the recovery business. Customers with newer cars based in more affluent areas are likely to do best under Direct Line's plans to tailor quotes according to individual circumstance. The company said it would not refuse to provide higher-risk customers with quotes.
The RAC said: "It's almost discrimination against young people who might not be able to afford particularly good cars or who may not live in the best area. We don't discriminate on age or vehicle. I can't see the benefit of doing it that way." The RAC works on a "flat fee" - once a customer chooses an RAC product, they pay the same, irrespective of age or address, although there is a "no- claims" discount which applies on one of its services.
In contrast to the AA and RAC, Direct Line will not have a nationwide patrol, but will use a network of independent garages it is sharing with Europ Assist, an existing player in the market.
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