Over a quarter of motorists (9 million drivers) are potentially missing out on huge savings on their car insurance by simply automatically renewing their policies. New research from Gocompare.com reveals that 27 per cent of drivers allow their policies to auto-renew – many in the mistaken belief that they will be rewarded for their loyalty.
Thirty-nine per cent of drivers have been with their current car insurer for three years or longer, with five per cent sticking with the same company for ten years or more. Only 45 per cent bother to check their renewal against what they paid for their insurance the previous year, while less than a quarter (24 per cent) take the time to read their renewal documents to check the premium and any policy amendments to see if the policy still provides all the cover they need. But, with car insurance premiums at record highs, blind loyalty could be extremely costly.
John Miles Gocompare.com’s business development director explained, “The average car insurance premium has risen by almost £650 to £1,332 in the last three years. This is a whopping 94 per cent increase and this trend is likely to continue for the foreseeable future as insurers get to grips with rising claims costs and the recent European Court of Justice ruling prohibiting insurers from calculating premiums based on gender from the end of 2012.
“Insurers rely on apathy to retain customers. Very few renewal notices show what you paid for your insurance last year, because your new premium may have increased significantly. Also, insurers make use of the annual renewal to review the cover they offer, typically increasing excesses or altering policy wordings. So it’s essential that you check not only the price, but the level of cover to ensure your policy continues to give you the protection you need.”
Loyalty (29 per cent) was the main reason why customers automatically renewed their polices, with over a quarter (26 per cent) believing that as their current insurer was the cheapest last year they would also be good value again this year. Other reasons for sticking with the same provider included lack of time (20 per cent), too much hassle (16 per cent), while 13 per cent stayed with the same provider because they found car insurance too confusing and didn’t have the confidence to switch. Worryingly, 16 per cent felt compelled to renew with their existing insurance provider, while six per cent were worried they’d lose their no-claims-bonus if they switched.
Nearly half of those surveyed (46 per cent) think that insurers could make it clearer how much their renewal premium has increased compared with what they paid the previous year. One in five believes that companies use underhand tactics to get customers to renew with them.
John concludes, “Just because your current insurer offered the best deal last year, you shouldn’t automatically assume that they will when your policy comes up for renewal. Our advice is simple, look at your renewal notice as soon as it arrives and 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 any savings.
“Finally, if you 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.”
Source : Gocompare.com Press Release
