Motorists who allow insurers to automatically roll-over their car insurance policy could potentially miss out on £2.55 billion* of savings
March is one of the busiest months of the year for car insurance renewals, and new research from Gocompare.com has revealed that 8.7 million (31%) UK drivers allowed their car insurer to automatically extend their policy for another year the last time they received their renewal.
- 8.7m (31%) UK drivers auto-renewed their car insurance policy last time
- 29% of those who auto-renewed believed that because their insurer was cheapest last time they would offer good value again on their renewal
- 28% of those who auto-renewed did so out of loyalty to the insurer
- 4.2m (15%) said they just didn't have time to switch
- 2.8m (10%) drivers have stayed with the same insurer for 10 years or more
But of the drivers who didn't simply automatically renew their insurance last time, almost half (48%) were prompted to act by the need to save money, and 35% just didn't trust their insurer to give them the best deal year after year. And shopping around can result in substantial savings, with 51% of Gocompare.com customers saving up to £293.54** on their car insurance by comparing their renewal premium against quotes from lots of other insurers.
The research also revealed that an astonishing three million (10%) drivers have been with the same insurer for 10 years or more, with 11.6 million (41%) staying with the same insurer for three years or longer. However, 86% of drivers agree that insurers give better deals to new customers than those renewing.
Little over half (51%) of drivers bother to check what they paid for their cover last year to see how much the renewal premium has changed, and insurers rarely make it easy for motorists to compare their new premium to their old one. An overwhelming 93% of drivers would like car insurers to make it clearer how much their renewal has changed, and more than three quarters (78%) believe insurers should make renewal documents easier to understand.
Just over half (52%) of drivers use a comparison site to check their renewal premium against those offered by other car insurers, whilst 15% telephone a selection of insurers or visit their websites. Just 3% approach an insurance broker to arrange their cover for them.
The findings come at a time when insurers have recently been forced to introduce new gender-neutral rates following the EU ruling that came into effect on 21 December last year. Insurers have had to find new ways to calculate premiums meaning that drivers shouldn't simply assume that their current insurer will still be offering the best deal when their renewal comes around.
Scott Kelly, head of motor services at Gocompare.com, commented: "Drivers who allow their car insurance policies to auto-renew and expect to get the best deal are kidding themselves. Renewal documents often start by explaining that you don't need to do anything for your cover to continue. Unfortunately, they don't explain that doing nothing is the worst thing to do if you want to be sure you're getting the most competitive premium and still have the cover you need.
"The EU gender ruling forced insurers to implement a major change in their pricing of car insurance policies, so this year it's particularly important for drivers to check their renewal premiums and compare them against quotes from competing insurers.
"Auto-renewing your policy almost certainly benefits your insurer far more than it does you, and although it may seem more convenient to file and forget your renewal documents, spending a few minutes comparing premiums and cover levels from numerous providers could save you hundreds of pounds a year."
Notes to editors:
On the 15th-18th Jan 2013, Vision Critical conducted an online survey among 1,431 randomly selected British car drivers who are Springboard UK panellists. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.
* The £2.55bn figure is based on there being an estimated 28,420,877 motorists in the UK (Source - Department for Transport vehicle licencing statistics). 31% of car drivers auto-renewed their car insurance at their last renewal which = 8.7m drivers. Average saving made by Gocompare customers was £293.54**. 8.7m x £293.54 = £2.548bn
** Saving of £293.54 with Gocompare car insurance - Based on independent research by Consumer Intelligence during 01 December 2012 to 31 December 2012. This average saving is achieved by 51% of consumers.