Sticking with existing insurance providers costs British drivers a total of £720 million every year, according to new research. Analysis from price comparison site MoneySuperMarket.com found more than 17 million drivers auto-renewed their insurance last year, rather than shopping around for a new deal.
The company’s data found almost more than four in 10 motorists (41 percent) allowed their insurance to auto-renew in 2020 – the same percentage seen in 2019. That means as many as 17.1 million drivers stayed with their existing providers, instead of looking for a new deal.
According to MoneySuperMarket.com’s research, the average auto-renewal costs drivers an average of £42 more than switching to a new provider. That means the company thinks British motorists spent a massive £720 million more than necessary by remaining with their existing providers.
For some drivers, however, MoneySuperMarket.com says auto-renewal had more expensive repercussions. One in five drivers saw their premium increase by between £26 and £50, while one in 10 (nine percent) saw rises between £51 and £75. Almost as many (eight percent) saw their premiums rise by between £76 and £100.
MoneySuperMarket’s associated survey of 2,000 drivers found almost one in 10 (eight percent) simply allow their insurance to renew automatically, while a fifth (20 percent) said they stayed with their existing provider for ease. And a tenth (12 percent) think changing provider is too difficult or too time consuming, while 13 percent said they didn’t think they would make significant savings by switching.
That’s despite the Financial Conduct Authority (FCA) rules that force insurers to show drivers their premium increases when their insurance is renewed. But in spite of these rules, 51 percent of drivers said they didn’t recall seeing these notifications. Of the remaining 49 percent, 31 percent said the FCA measures did not encourage them to shop around.
Nevertheless, MoneySuperMarket’s research also showed the cost of an average premium decreased by three percent in the final few months of 2020. During the final three months of 2019, the average premium cost £503, but that had fallen to £490 in the last few months of 2020 – despite a slight rise in prices compared with the three-month period from July to September 2020.
“Letting your car insurance auto-renew almost always sees you end up paying more, with our research showing that the average premium increase last year was £42,” said Kate Devine, car insurance expert at MoneySuperMarket. “While it’s great to see that many of us are shopping around for a better deal, the number of people allowing their policy to auto-renew is still high at 41 percent.
“If your policy is coming up for renewal, you should always shop around to see what deals are on the market – a new deal on your car insurance is very easy to find online and could save you up to £218.”