Should I let my home insurance auto-renew?

Key takeaways

• Auto-renewal is more convenient but you'll often get a better deal by shopping around

• Insurers can increase the price when your policy auto-renews but they must notify you

• Since 2022 home insurers have been banned from charging existing customers more

What is automatic home insurance renewal?

Automatic renewal is a feature where your home insurance policy renews for another year without any action required on your part. Most policies are set up to automatically renew unless you explicitly opt out.

Insurers can increase the price you pay each year but they must notify you before the new policy starts. They will usually do this about a month before the renewal date.

How do I renew my home insurance?

Auto-renew existing policy

You do not have to do anything. Your new policy will start as soon as your old one ends, and your insurer will charge the new policy price to the bank details they have for you.

Switch providers

Let your current insurance know you do not want your policy to auto-renew. You can usually do this at any point during your policy term.

You'll want to make sure your new home insurance starts as soon as your old one finishes so there isn't a gap in your cover.

Is it more expensive to auto-renew?

Auto-renewing used to almost always be a bad deal, because insurers took advantage of their existing customers' desire for convenience to charge them higher prices than they charged newer customers. But in 2022 the Financial Conduct Authority (FCA), a financial regulator, banned this practice for home and car insurance renewals.

Even with the FCA's new rules, you will generally still get a better deal if you shop around each year rather than letting your home insurance automatically renew. Different insurers offer different prices, but also different levels of cover and excess. (This means that a policy with a cheaper headline rate may not be your best option.)

Even if you know you want to stay with your current insurer it can be worth comparing quotes. Some insurers will match or even beat a cheaper quote from a competitor offering a similar policy.

Our research shows that home insurance policies have increased by 71% since 2019^{^} .

Comparing quotes with MoneySuperMarket could save you up to £193^{^}

Are there advantages to auto-renewing?

Yes - autorenewal guarantees you won't ever be without home insurance cover. It's also the most convenient option, at least in the short term, because it doesn't require any extra time or effort from you.

But this convenience could end up costing you if you need to make a claim and discover a policy you set up under different circumstances no longer covers everything you need it to. For instance, you might now have more expensive personal belongings in the house, or you might even have built an extension on the property meaning the rebuild cost would be higher.

Inflation has increased the cost of replacing home items, meaning even if your home contents has not changed significantly the amount of insurance cover you'd need to replace it might have.

Will I be charged to renew my home insurance?

Probably not - renewal charges are not common. Some insurance companies do charge pre-renewal deposits, however.

This deposit is usually equal to one month's premium. It is taken from your account before the renewal date and deducted from the next year's insurance cost if you choose to renew. If you do not wish to pay this deposit, you should contact your insurer in advance of your renewal date.

Can I cancel if I accidentally auto-renew my home insurance?

Yes. By law insurance customers are entitled to a 14-day cooling-off period during which you can cancel your policy and have most of your money refunded. However, many insurers will charge you admin fees.

If more than 14 days have elapsed, you can still cancel your home insurance policy, but the cancellations fees may be higher and you will only be entitled to a pro-rated refund; you will have to pay for the days you were covered. Policy add-ons may not be refunded at all.

If you have claimed on your home insurance since the policy started you can still cancel it, but you will not receive any money back.

Am I entitled to a no-claims discount if I switch providers?

A no-claims discount, which accumulates with each claim-free year, can significantly reduce the cost of your home insurance. Some insurers allow you to transfer this discount when switching providers, but it's always best to confirm with the new provider.

When should I renew my home insurance if I'm switching providers?

A few weeks before your current policy ends. This allows time for fee-free switching and avoids you making rushed decisions that could cost you more.

Can my insurer refuse to auto-renew me?

Yes, insurers can refuse to renew your policy. This typically happens if they think there is an increased risk that you will make a claim or if the policy terms have been violated.

Is it better to pay monthly or annually?

Paying annually for home insurance is usually less expensive than monthly payments.

Compare home insurance with MoneySuperMarket

MoneySuperMarket offers a user-friendly comparison tool that provides home insurance quotes based on your details. You'll be presented with competitive quotes, enabling you to choose the best deal before finalising the purchase directly with the provider.

Ensuring your home is properly protected is important, and staying informed about your insurance options can save you money and stress. Remember to review your policy annually, consider any changes in your circumstances, and don't hesitate to shop around for the best deal. With the right approach, you can enjoy peace of mind knowing your home is secure and you haven't overpaid to insure it.