Aarrgghh! We’re wasting £2.37 billion a year* by ‘auto-renewing’ our car insurance
Ever noticed how easy it is just to renew your car insurance with the same firm every year? Usually, you don’t even need to lift a finger because the insurance company does all the work for you. It’s called ‘auto-renewal’.
Sounds good, but it’s not. Because your friendly, helpful, “let us take care of it for you” insurer will in fact probably take the opportunity to hike your premium, leaving you paying much more than you would if you shopped around.
Every year in the UK we’re spending a whopping £2.37 billion more than we need to on car insurance simply because we allow our current insurer to auto-renew our policies instead of finding cheaper deals elsewhere.
Check your renewal notice – but be prepared for a shock
In recent years we’ve lobbied the government and the insurance industry regulator – the Financial Conduct Authority (FCA) – to change the rules to cut the money wasted on auto-renewals.
In April 2017, we saw a positive result. Your renewal letter or email now has to show you what you paid last year alongside this year’s price – so you can see the scale of any premium hike. This wasn’t happening before.
When you see the scale of any increase, it should encourage you to shop around to see how much you could save.
Our research shows that 51% of customers could save up to £275** by shopping around for their car insurance with MoneySuperMarket.
So it’s easy to see why you should shop around at renewal instead of just accepting your current insurer’s offer.
Remember: when it comes to car insurance, loyalty rarely pays!
* 41% of policyholders who auto-renewed at last renewal = 8,646,298 x £275 = £2,377,731,950
** Consumer Intelligence data – January 2017