Auto-renewal of car insurance

Allowing your insurer to auto-renew your car insurance is one of the most common mistakes made by customers who want to save.

Alice Morgan

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Auto-renewal basics

Auto-renewal happens when you come to the end of your insurance deal.

Your insurer will automatically renew your contract with them. Sometimes they’ll even charge you more for sticking with them, even if nothing’s changed on your policy.

Although it’s less hassle to let your insurance roll over for another year, you could be missing out on savings with another provider.

Key points

  • Don’t let your insurance auto-renew - you could end up paying more than you need to
  • New customers are often offered discounts and deals that don’t apply to existing customers
  • Save on your insurance by shopping around

Is auto-renewal legal?

It’s entirely legal for insurers to auto-renew your car insurance contract but by law, they must tell you:

  • Last year’s price - so you can easily compare it to your new premium
  • To check your cover and to shop around for the best deal - if you’ve renewed four times in a row, they need to encourage you to shop around.

This is all to make sure you’re treated fairly, because it’s in your best interests to see if you can get a better deal elsewhere.

In 2018, 4.6m drivers allowed their car insurance to auto-renew. That means the UK missed out on a collective saving of £592m![1]

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The real cost of loyalty

According to our research, 30% of people said that loyalty was the main reason they had stuck with their insurer - even though new customers are offered the best deals.

Other reasons for sticking with the same provider included good experience with a previous claim (9%) and assuming that the insurer would offer them good value because they were the cheapest provider the year before (15%), which isn’t always the case.

Switching provider was seen to be a difficult task too. 22% said they lacked the confidence to switch and 10% claimed switching was too much hassle.

We also asked drivers about the renewal information they received from providers, many found it confusing.

Only 35% of drivers looked at what they paid for car insurance the previous year and just 17% checked if there were any changes to their cover. This could become an issue if you try to make a claim on your windscreen protection for example and find you’re not covered anymore.

It’s really easy to switch insurers.

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How to stop your insurance auto-renewing

Make sure you stop your auto-renewal before the policy start date if you think you’ll be paying too much – you can use us to compare prices.

If you’d rather stick with your existing insurer, get in touch and see if you can negotiate a better price. Explain that you’re a loyal customer and see what they can do for you.

If they won’t budge on price, tell them to cancel your auto-renewal.

Just make sure you do it in good time – if you let your policy auto-renew you’re still allowed to cancel, but you’ll probably be charged for the time you’re covered by them and an administration fee - even if you’re still in your cooling off period.

It doesn’t take long to compare prices with us instead, and it could save you money.

Most importantly though, make sure you’re always have valid insurance in place and the right amount of cover for you.

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[1]Based on independent research by Consumer Intelligence during 01 December to 31 December 2018: 51% of consumers could achieve a saving of up to £247.29 with Gocompare car insurance.

Department for Transport’s ‘Vehicle Licensing Statistics: (April 2018)’ by the end of 2017 there were 37.7m vehicles licenced for use on the roads in Great Britain, 83% of which were cars = 31,291,000. 15% of motorists auto-renewed their car insurance policy at the last renewal without checking prices. 15% of 31,291,000 = 4,693,650. 51% of 4,693,650 =2,393,761. 2,393,761 x 247.29 = £591,953,157 rounded to £592m

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