An estimated 1.3bn lost in ‘renewal trap’
New research highlights that despite insurance premiums reaching record levels in the last year, drivers are wasting an estimated £1.3bn by allowing their cover to automatically renew without checking to see if they could get the same cover for less money.
GoCompares Car Insurance’s Auto-Renewal Study revealed that 15% of drivers fall for the insurance renewal trap, letting their insurance continue with the same provider for another year without checking whether they are getting a good deal.
When asked why they had auto-renewed their cover, 24% had done so out of loyalty to their insurer while 11% confessed they’d done so because they find car insurance confusing and didn’t feel confident enough to switch providers. Other reasons for sticking with the same insurer included a good experience with a past claim (nine per cent), the expectation that because the current insurer was competitive last year they would offer a competitive renewal price (nine per cent).
Commenting on the research findings, Matt Oliver from GoCompare Car Insurance said, ‘According to the Association of British Insurers, the average car insurance premium paid rose by 9% in 2017 to a record high and, price rises are expected to continue this year. But, the good news is that price differences for the same cover can vary widely between insurers, so savings can be made by simply shopping around.
‘When policies come up for annual renewal, insurers offer to continue your cover without you needing to take any action. While this approach helps ensure you don’t inadvertently allow your insurance cover to expire, auto renewing customers can pay a hefty price for the convenience. Insurers typically use their most competitive offers to attract new customers and rely on existing customers’ apathy to charge higher renewal prices.’