June 20 2013 Latest news:
Adam Aiken, Editor
Monday, September 17, 2012
Automatically renewing your car insurance might be convenient – but it could also be costing you dearly.
Motorists are wasting billions of pounds a year by failing to shop around for the best insurance quotes when it comes to renewal time.
The inertia of millions of drivers means many of them are being charged way over the odds.
This month is traditionally a busy one for policy renewals thanks to the release of new number plates – and it means that much of the money annually wasted on auto-renewals will be chucked away over the next few weeks.
When it comes to the total amount wasted by drivers each year, estimates range between £3bn and nearly £5bn. That is a lot of money.
“Car insurance premiums are at unprecedented high levels and significant savings can still be made by comparing policies, as different insurers assess risks differently,” said Scott Kelly, of price-comparison site Gocompare.com
“We know from our own figures that motorists can save an average of £399 simply by changing their insurer,” he said.
“Yet, incredibly, just under a third of drivers haven’t switched for more than three years. During this period, the average fully comprehensive car insurance premium has more than doubled.”
Of those drivers who allow their insurers to renew their policies automatically, a third do so in the belief that the cheapest provider last year will be the cheapest this year, too.
But Mr Kelly said such loyalty was misplaced. “In the last couple of years, all insurers have been forced to revise their rates, so drivers shouldn’t take anything for granted.
“On the face of it, simply allowing your policy to roll on for another year may look like an attractive and easy option, but it could cost you dear.”
Moneysupermarket.com said its research showed that nearly eight million motorists a year fell into the auto-renewal trap.
Pete Harrison, a car insurance expert at Moneysupermarket, said: “With many families returning home from summer breaks, household budgets are likely to be strained, and it’s important people don’t just accept the renewal prices from their car-insurance providers.”
The average saving that Moneysupermarket said can be made by shopping around is just over £400 – broadly in line with the figures from Gocompare.
Motorists aged 55 and older are typically the most loyal when it comes to staying with their insurance providers.
According to Moneysupermarket, drivers in this category stay with their insurers for an average of more than three years.
“No matter where you live or how old you are, it’s vital to do your homework at renewal time, as searching for a better deal doesn’t cost you anything and there is a lot to gain,” said Mr Harrison.
BUT TAKE CARE WITH PRICE-COMPARSON SITES
While price-comparison websites can prove a useful tool for people looking to cut their costs, there are drawbacks to the process.
Shaun Lenton, director of NW Brown Insurance Brokers, said it was worth considering a broker to find a policy that covered all the bases.
“There are still a lot of drivers out there who remember shaking hands with their insurance broker after accepting the car quotation they had just been given,” he said. “There are now, however, a growing band of purchasers who have never spoken to anyone about car insurance as online quotes take over. It is certainly possible to obtain more cost-effective motor insurance online as long you can satisfy yourself when you press the ‘buy’ button that the policy meets your exact requirements.”
Mr Lenton said the following factors were important:
Does the quote include no-claims protection?
Can you use a franchise dealer to repair your car?
Does the policy allow you to drive other cars?
Is there an administration fee if you make a change to your policy?
Does your new policy match your current one?
“These are just a few of the things you could ask your broker before purchasing a new policy.”