More than one-third of British drivers could be missing out on best car insurance deal, survey claims
More than a third of British drivers could be missing out on getting the best insurance deal by letting their annual policy renew automatically instead of shopping around, a survey claims.
Customers who roll over their contract typically end up paying inflated premiums as part of a "loyalty penalty", according to the poll commissioned by moneyexpert.com.
Two in five of those surveyed who auto-renewed their deal said they believed they were getting the best possible deal.
However, drivers who auto-renewed were 50 per cent more likely to be paying more than £800 for their car insurance than if they found a new policy by other means, according to the survey and data from the Association of British Insurers (ABI), Financial Conduct Authority (FCA) and Citizens Advice.
Mike Rowe, chief operations officer at moneyexpert.com, said: “Our survey results show that drivers who let their car insurance auto-renew are paying more than those who shop around online or negotiate a better deal with their existing provider.
“This is consistent with findings in countless other reports, including from the ABI, FCA, and Citizens Advice – all of whom warn against the ‘loyalty penalty’ faced by insurance customers who stick with their provider year after year.
“The FCA’s transparency initiative introduced in 2017 forces insurers to be clear about price differences when issuing renewal quotes.
“Despite this, more than a year later, our survey results show that not only are around a third of drivers still letting their insurance auto-renew, but that number has increased since January 2018.
“Some 36 per cent of those who auto-renewed were convinced that they were getting the best deal possible, which is statistically unlikely to be the case.
“Drivers should use a comparison site to compare car insurance quotes annually and switch insurer where necessary to make sure that they are getting the best rates.”
In 2018, 29 per cent of drivers let their car insurance auto-renew, compared to 30 per cent who negotiated a new policy with their current provider and 41 per cent who searched online for the cheapest option, according to data collected by moneyexpert.com.
In 2019, 36 per cent of drivers let their car insurance auto-renew compared to 30 per cent who negotiated a new policy with their current provider and 34 per cent who searched online for the cheapest option.
And fewer drivers are searching online for the best deal.
Over both years, of those who auto-renewed, 48 per cent agreed they were "aware of the savings that could be made by switching but didn’t want to deal with the hassle".
Over 35 per cent said they were "convinced that they were getting the best deal possible by auto-renewing", and 15 per cent were "unaware that they could have saved money by switching online".
SWNS
