Driv­ers’ £800m in­sur­ance rip-off


Daily Star Sunday - - RESULT! -

BRI­TAIN’S car driv­ers are be­ing charged up to £800mil­lion too much for their in­sur­ance re­newals.

They are be­ing pun­ished by their in­sur­ers for re­main­ing loyal to one com­pany.

Re­search re­veals that at their last re­newal 15% of driv­ers al­lowed their cover to au­to­mat­i­cally roll over for another year, with­out check­ing whether the price they were of­fered was com­pet­i­tive.

Forty-three per cent re­newed their in­sur­ance with the same provider, but only af­ter check­ing other quotes. Just 39% switched firms, ac­cord­ing to the sur­vey for GoCom­pare Car In­sur­ance.

While auto-re­newal has gone on for years – caus­ing one in­sur­ance boss to re­cently re­fer to the mar­ket as “dys­func­tional” – it is un­der scru­tiny be­cause of new Fi­nan­cial Con­duct Au­thor­ity guide­lines which re­quire in­sur­ers to in­clude last year’s pre­mium in re­newal let­ters. In­sur­ers have to tell cus­tomers how much they are putting up their pre­mi­ums, but they are still “re­as­sur­ing” them they don’t need to do any­thing for their in­sur­ance to con­tinue.

While many peo­ple are wise to the prac­tice – 58% of driv­ers say they know in­sur­ers save their best prices for new cus­tomers – mil­lions are still be­ing lulled into bad deals by the con­ve­nience of hav­ing to do ab­so­lutely noth­ing to re­main cov­ered.

Just over a third of Brits (35%) auto-re­newed be­cause the re­newal price wasn’t hugely dif­fer­ent to the pre­vi­ous year’s pre­mium.

Other rea­sons for stick­ing with the same provider in­cluded: loy­alty (21%); hav­ing a good ex­pe­ri­ence with a claim (9%); and not feel­ing con­fi­dent enough to switch be­cause they find buy­ing car in­sur­ance too con­fus­ing (7%).

The main rea­son given for switch­ing in­sur­ers was an in­crease in the re­newal price (71%). Top tips to get the best in­sur­ance deals:

1. Put your re­newal date in your di­ary to give your­self time to shop around.

2. Never ac­cept your re­newal quote with­out first check­ing the new price you are be­ing of­fered is com­pet­i­tive.

3. Com­pare prices and make sure you are mak­ing a like-for-like com­par­i­son. Un­der­stand all the charges, any penal­ties, ex­clu­sions and terms and con­di­tions.

■ CRUNCH: Many driv­ers don’t bother to switch in­sur­ers

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