Auto-renewal could cost £1.2bn
Gocompare.com’s Car Insurance Auto-Renewal Survey has revealed that 5.8 million motorists a year fall into the auto-renewal trap costing motorists up to £1.2bn per annum.
Gocompare.com’s Car Insurance Auto-Renewal Survey also revealed that on average, drivers have been with their current insurer for 3.3 years, but a 16% have stuck with the same provider for five years or more. However, many of those surveyed don’t feel insurance companies reward them for their loyalty, 58% think that insurers offer a better deal to new customers than those who renew.
When asked why they allowed their car insurance to renew automatically 39% thought that because their provider was the cheapest last year, they would be good value this time around too. Other reasons for sticking with the same provider included loyalty (24%), a good experience with a past claim (11%) while 5% said that they weren’t confident enough to switch, finding car insurance too confusing.
The survey also questioned drivers about the renewal information they receive from providers, revealing that many drivers find renewal letters tricky to understand and lacking key information:
• 37% said that insurance renewal packs should be easier to understand;
• 47% want insurers to make it clearer how much their renewal has increased by compared with last year;
• 39% don’t know exactly how much they paid for their insurance last year;
• Only 50% check last year’s premium to see how it has changed;
• Just over a third (34%) check their renewal documents for any changes to the cover provided;
• 28% of those surveyed said that they felt under pressure to renew with their existing provider;
• 24% said that insurance companies use underhand tactics to get you to renew with them.
When specifically told that their policy will be automatically renewed but some elements of cover are changing 14% ignore it and assume nothing very important will have changed.
Matt Oliver, from Gocompare.com Car Insurance, commented, ‘New registration plates are issued in March and September, making them the busiest months for car insurance quotes and renewals. The car insurance market is fiercely competitive and insurers often offer better deals to new customers than for those renewing existing policies.’