Don’t take the easy route with insurance renewal
MANY people tell me that when it comes to vehicle and home insurance they simply accept the auto renewal each year, as it seems the easiest route to take.
However, although the convenience of sticking with the ‘devil you know’ appears attractive, it is rarely a wise move financially, as the following readers’ stories highlight:
■ DIMITRI paid £147 for his home insurance in 2018. When his policy auto renewed the premium increased to £560. Dimitri questioned the insurer about this and they informed him that the underwriters had re-visited the risk assessment and as a consequence, the risk was deemed greater causing a premium increase.
Dimitri says that none of his circumstances have changed from the previous year.
■ JANE paid £405 for her car insurance. The policy auto renewed in April and trusting that the premium would be the same, or thereabouts, she didn’t even open the renewal letter.
However, she then discovered that the premium had increased to £1,050.
When she approached the insurer about this they said that the increase was due to the fact that she had moved house.
Jane had indeed moved house, but only to a location five minutes from her previous address and as she put it, “I didn’t move to Beirut”.
■ SAMSON was involved in a car accident last year and it was agreed that he was not at fault. The other driver’s insurer therefore paid out.
Like Jane, he didn’t check the premium when the policy renewed in May 2019 but received a shock when he saw on his online banking that it had increased by a whopping 250%.
When he asked the insurer about this he was told that it was because of the accident, even though it wasn’t his fault.
These readers’ stories are not unique, as many people who simply auto renew their insurance policies experience the same issue with needless price hikes. It is therefore clear that it is never a good idea to rely on an auto renewal and that being a so called loyal and valued customer of an insurance company does not pay.
Instead, you should always shop around for the cheapest and best deal when it comes to renewing insurance policies.
Luckily there are now lots of comparison websites on the market that assist with this, so it’s now a relatively quick and easy task.
■ Dean is solicitor-advocate, barrister, arbitrator at Consumer Dispute Resolutions Ltd and consumer lawyer of the year (2018). For more of his advice visit the consumer lawyer. blog