Drivers overpaying £800m in renewals
Drivers are being charged up to £800m too much on their car insurance renewal according to the findings of a new study by GoCompare Car Insurance.
The research reveals that, at their last renewal: 15% of drivers allowed their cover to automatically roll-over for another year, without checking whether the price they were offered was competitive; 43% of drivers renewed their insurance with the same provider, but only after checking other quotes; and just 39% switched provider.
Based on this, GoCompare estimates that three million UK motorists could be overpaying their car insurance by a collective £800m by auto-renewing.
While the practice of auto-renewal has gone on for years it has been thrown under a fresh spotlight by new FCA (Financial Conduct Authority) guidelines that require insurers to include last year’s premium in renewal letters. As a result, insurers are now forced to tell their customers exactly how much they are putting their premiums up by.
The survey highlighted that just over a third of drivers (35%) had auto-renewed because the renewal price offered wasn’t hugely different to last year’s premium. Other reasons for sticking with the same provider included: loyalty (21%); a good experience with a claim (nine per cent); and not feeling confident enough to switch because they find car insurance confusing (seven per cent).
The main reason cited for switching was an increase in the renewal price (71%).