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Automatically renewing car insurance not always the best policy, argues Gocompare

Cherry Reynard
Written By:
Cherry Reynard
Posted:
Updated:
27/08/2014

Automatic renewal of car insurance policies could leave motorists over-paying by almost £2bn, finds new research.

Research by GoCompare.com shows that 36% of drivers have now been with the same insurer for 3 years or more and less than half (46%) check last year’s premium when renewal arrives. 8.2 million drivers roll over their last car insurance policy, potentially missing out on savings of around £223 per year each. Only 46% of drivers say they checked last year’s premium to see how it had changed at renewal and less than a third (31%) checked their renewal documents for any changes to the cover.

The main reason given for sticking with an insurer was that they were the cheapest last year and were therefore still likely to be good value (36%). Another 26% put it down to loyalty, saying that their insurer had always looked after them in the past. 21% cited the hassle factor, while just 8% said they were worried they would lose their no-claims bonus.

Lee Griffin, of Gocompare.com Car Insurance, said: “September is always a busy time for insurance renewals and while not everyone will be changing their car this year, there will be millions of renewal notices already sitting on the nation’s coffee tables and ‘to-do’ piles. Now is the time to be shopping around to try and get a better deal as many insurers will happily renew your insurance automatically unless you contact them to tell them otherwise.

“Looking at our research, millions of drivers are potentially overpaying for their car insurance to the tune of nearly £2 billion a year, in the mistaken belief that an insurer offering the cheapest premium one year is bound to offer the same good value the next. However, loyalty counts for very little when it comes to insurance and many drivers would be better off switching rather than sticking with the same insurer….If you do decide to switch insurers to save money, don’t forget to contact your old insurer in good time to advise them that you wish to cancel your policy when it expires. If you don’t get in touch they may renew your policy using an existing direct debit and you could face a cancelation charge when you realise you’ve got two policies in force.”


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