"Read your renewal” warning from Gocompare.com
Comparison site urges motorists to read their car insurance renewal letters to avoid paying over the odds for their insurance and to make sure they have the cover they need.
New research reveals that most drivers (61%) think that insurers give a better deal to new customers than to those that renew. But despite this many admit that they don't read their car insurance renewal letters thoroughly, with many finding them tricky to understand and lacking in information. More worryingly, a quarter of those surveyed thought that insurers use underhand tactics to get people to renew their car insurance policies, while 10% felt under pressure to renew with their existing provider.
The survey of 2,000 people, commissioned by Gocompare.com to mark one of the busiest times of the year for car insurance renewals, found that:
Only 51% said that they compare their renewal against last year's premium to see how it has changed
34% said that they check for any changes to the cover provided
13% reconsider the type and/or level of cover they need for the coming year
Even when advised by their insurer that their car insurance policy would be automatically renewed, but that some elements of the cover were changing, only half of those surveyed said that they would read through the policy changes to make sure they still had the cover they needed. And just 35% would contact their insurer to discuss the changes. Surprisingly, 8% said that they would assume that nothing important had changed and ignore it.
Unsurprisingly, the survey found many drivers thought there was room for improvement in the information provided by insurers at renewal:
48% said that insurers should make it clear how much their renewal premium has increased compared to last year
38% said that insurance renewal packs should be easier to understand
Scott Kelly, head of car insurance at Gocompare.com, commented: "Our research suggests that most drivers believe that insurers almost always offer cheaper quotes to new customers than existing policyholders, and in our experience, this is often the case.
"Insurers rely on apathy to retain customers. Very few renewal notices show what you paid for your insurance last year, because your premium may have gone up and insurers don't want to spell this out for you in case the increase prompts you to shop around for a better deal. However, this is exactly what you should do because premiums vary considerably from provider to provider. By simply comparing car policies using Gocompare.com, motorists could save up to £237.74* on their renewal.
"Insurers also review the cover they provide from time to time; typically this can mean changes to excesses or alterations to policy wordings. So when you receive your renewal pack it's essential that you check not only the price, but the level of cover you are being offered to ensure your policy continues to give you the protection you need."
Scott Kelly concluded, "When buying car insurance, many people think that they are signing up to a yearlong policy. But many motorists don't realise that they could be committing to a policy that continuously renews - unless they contact their provider to cancel it. So, if after having considered all your renewal options you decide to switch insurer, then you must contact your existing provider to advise them that you do not wish to accept their renewal offer, otherwise you could face hefty cancellation charges."