Staying loyal to insurer costs Brits £37m a year
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.
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