Menu
Save, make, understand money

Insurance

Auto-renewal costs motorists up to £1.2bn annually

Kit Klarenberg
Written By:
Posted:
25/08/2015
Updated:
26/08/2015

Almost six million drivers simply opt to automatically renew their car insurance every year, rather than shopping around for a better deal, Gocompare.com research reveals.

Autumn is one of the year’s peak insurance renewal periods, with insurers competing for new business by offering attractive introductory offers and rates. However, Gocompare.com research suggests 18 per cent of the UK’s 32 million drivers will simply let their existing policy rollover via auto-renewal, rather than compare prices.

The findings indicate 39 per cent of drivers who allow their policies to automatically renew do so because they think their provider will be good value this time around too. Other common reasons for sticking with the same provider included loyalty (24 per cent), a good experience with a past claim (11 per cent) and a lack of confidence with switching (5 per cent).

The study also suggests 37 per cent of drivers think insurance renewal packs should be easier to understand, and 47 per cent want insurers to make it clearer how much their renewal has increased by, with 39 per cent unaware of how much they paid for their insurance last year.

Trust in insurers is revealed to be low among drivers, with 28 per cent feeling under pressure to renew with their existing provider, and 24 per cent believing insurance companies use underhand tactics to secure renewal.

However, drivers are also failing to adequately study information, with 50 per cent admitting they don’t check last year’s premium to see how it has changed, and only 34 per cent checking renewal documents for any changes to their cover.

Sponsored

Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind

Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with

Sponsored by Post Office

When informed their policy will be automatically renewed, but some elements of cover are changing, 14 per cent assume nothing very important will have changed and ignore the notice.

Matt Oliver of Gocompare.com Car Insurance said: “The car insurance market is fiercely competitive and insurers often offer better deals to new customers than those renewing existing policies. Even if your current insurer offered the best deal last year, you shouldn’t automatically assume they will when your policy comes up for renewal.

“Use your renewal letter as a prompt to take action. Compare the price and cover against last year’s documents, consider any changes you might need to make to the cover and take a look at similar policies on a comparison site to see if you can make savings. Money saved on your insurance goes a long way towards paying for other motoring costs.

“If you do decide to switch, don’t forget to notify your current provider. Most policies automatically renew, unless you tell the insurer otherwise within the 14 day cooling off period.  Miss the cut-off date and you could face hefty cancellation charges.”

[article_related_posts]