The £1.4bn car insurance renewal rip-off

ALMOST five million motorists are falling into a £1.4billion insurance trap by automatically renewing their policy each year, according to a report.

Insurance companies have for years been accused of ripping off loyal customers by ratcheting up their premiums each year. But despite efforts to crack down on this problem, many drivers are still failing to shop around for a cheaper deal, according to a poll of just over 2,000 drivers by comparison website Go Compare.

Following a Daily Mail campaign, rules introduced by the City watchdog just over a year ago made insurers disclose last year’s premium on renewal letters and a message urging drivers to shop around.

Although the poll showed signs this was having some effect, the proportion of drivers automatically staying with their existing provider has fallen only fractionally from 17 per cent to 16 per cent.

Extrapolated across the 31 million cars licensed in the UK, this indicates that nearly five million are paying over the odds. With the average driver saving £268.69 by shopping around, that equates to £1.4billion being overpaid each year.