Are you losing out by auto-renewing your car insurance policy?

Are you losing out by auto-renewing your car insurance policy? 10th March 2015

In the modern age of the internet and numerous high-profile comparison sites, drivers in the UK are better placed than ever before to get the best deals on their car insurance policies. However, many are still paying way more than they need to by failing to use the tools at their disposal. 

As we enter prime renewal time in early March, more people than at any other time of the year are having their policies renewed, but many are not taking the time to check they are getting the best deal possible. 

According to MoneySupermarket, as many as 23 per cent of all motoring insurance policies are automatically renewed every year in the UK without the driver having checked even one other quote. It often leads to them paying more than they could be elsewhere, and the comparison site believes this could be costing Brits a collective £1.3 billion every year – that's £113 per driver. 

Most people wouldn't want to pay more than they have to when having new tyres fitted or having other maintenance work done, so why does the same not apply when it comes to getting a new car insurance deal?

The research shows that there are a number of different reasons for this being the reality:

Confusion: It's often the case that a renewal document will confuse the driver. For example, most won't tell you what you paid last year, and if you've forgotten, you might not realise that the deal you've been offered is not the best. 

Convenience: Signing up to a policy with your card and paying monthly for your insurance by direct debit can be convenient, but costly. When it comes to the end of the year, many will see it as easier to simply let the policy roll over rather than having to set up new payments. 

Remembering: When you sign up to most policies, it's the case that you have automatically agreed to renew if you don't cancel before the agreed renewal date. And given the hectic pace of life for most people, this can sometimes pass you by before you've even realised it. 

Hard to cancel: Even for people who do want cancel, the report cites many as claiming that it's hard to do so. Finding details of phone numbers to call and processes to cancel a new policy is often not very easy, while other providers might even charge a cancellation fee that puts many off. 

So how do you make sure that you are getting the best deal possible on your policy? According to the experts, the simplest thing to do is to make sure you shop around. Always make a note of when your policy is set to be renewed on your calendar, and set up some time to check around for the best possible deal online. 

You can even use your renewal note to your advantage. Once you've been quoted a new price by your current insurer, call around other companies and tell them what you've quoted. You never know, they might end up giving you an even better deal.

Posted by Danielle Barge