You are here: Home -

Staying loyal to insurer costs Brits £37m a year

Written by:
When it comes to getting cheaper insurance, loyalty certainly doesn’t pay.

New analysis reveals British homeowners are collectively wasting £37m each year by sticking with their home insurance provider at renewal time rather than shopping around for a cheaper deal.

MoneySuperMarket found a quarter (26%) of homeowners with buildings and/or contents cover automatically renewed their policy with their existing provider and almost two fifths (39%) saw their premiums rise as a result.

Loyalty tax

Over half (54%) of these people chose their current provider because they offered the cheapest deal when they took out the policy. But for those who automatically renewed, premiums rose by £9 on average.

If those customers shopped around at renewal, they could see savings of £59 each or £243m collectively, the comparison site said.

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “Insurance companies trick loyal customers into sticking with them– but with higher premiums – through confusing renewal letters and notices, whereas new customers are offered great rates to get them through the door. If this happens year on year, loyal customers can end up paying hundreds of pounds more than they need to.

“When it comes to insurance, the message is clear: loyalty doesn’t pay.”

When renewing their home insurance, only 15% of policyholders looked around for other quotes before negotiating with their existing provider to get a lower price. A quarter (26%) did not shop around for cheaper quotes.

Top reasons why homeowners auto-renewed rather than change providers:

  • A third were happy with the cost of their insurance
  • A fifth couldn’t be bothered to shop around
  • Almost a fifth said loyalty stopped them from moving
  • 16 per cent liked their current provider’s brand
  • One in seven liked the customer service their current provider offers

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week