GoCompare study finds
With March one of the busiest months for car insurance renewals, Gocompare.com warns that UK drivers are wasting an estimated £1.5bn a year by allowing their car insurance to automatically renew without checking they’re getting a good deal.
New research*** by Gocompare.com Car Insurance reveals that 5.25m motorists fall for insurers’ auto-renewal ruse, allowing their insurance to be renewed automatically without even checking to see if they could get the same cover for less money.
Gocompare.com’s Car Insurance Auto-Renewal Study revealed that young drivers (aged 18 to 24), who potentially have the most to save, were the most apathetic. Just under a quarter (23 per cent) fell into the auto-renewal trap – leaving their insurance to roll-over without checking other quotes. When asked why they had auto-renewed their insurance 41 per cent had done so out of loyalty to their insurer while 29 per cent admitted they’d done so because they find car insurance confusing and didn’t have the confidence to switch.
The survey also found that just under a third (32 per cent) of drivers have been with their current insurer for three years or more, while 22 per cent have stayed with the same provider for four years or more. However, many of the drivers surveyed don’t feel insurance companies reward them for their loyalty, 59 per cent think insurers give a better deal to new customers than those who renew.
When asked why they allowed their car insurance to automatically renew 31 per cent thought that because their provider was the cheapest last year, they would be good value this time around too. Other reasons for sticking with the same provider included loyalty (30 per cent), a good experience with a past claim (11 per cent), while 9 per cent said that they weren’t confident enough to switch – finding car insurance too confusing.
Drivers were also asked about the renewal process and the information they receive from insurers. This revealed that many find the system tricky to understand and lacking key information:
- Only 29 per cent said they read renewal information thoroughly;
- A third said renewal information should be made easier to understand;
- Just 43 per cent check last year’s premium to see how it has changed;
- Only 29 per cent check their renewal documents for any changes to the cover provided;
- Over a third (34 per cent) don’t trust insurers to tell them when they are paying too much for cover.
When specifically told that their policy will be automatically renewed but some elements of cover will be changed, 19 per cent of those surveyed admitted to ignoring the warning, assuming nothing very important will have altered.
Commenting on the research findings, Matt Oliver from Gocompare.com Car Insurance said, “With the first number plate change of the year, March is one of the busiest months for new car sales and, as a consequence – car insurance quotes and renewals. But, with car premiums hitting record highs, it’s now more important than ever to make sure you’re not getting a raw deal at renewal.”
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