Gocompare.com comments on the ABI’s proposals to improve transparency at renewal
According to Gocompare.com’s figures 8.8 million drivers rolled-over their last car insurance policy without checking for cheaper premiums*, missing out on savings of up to £225.09**
The survey found that the average driver in the UK has been with their current insurer for 2.9 years, and that 31% of drivers have stayed with the same insurer for three years or more. Nearly half (46%) of the 8.8m drivers who allowed their cover to automatically renew did so in the belief that because their insurer was cheapest last time they were bound to be good value this time around too.
26% of drivers said insurers should make it clearer how the renewal price had changed from last year, while more than 1 in 10 (11%) thought that insurers use underhand tactics to get you to renew policies.
Lee Griffin from Gocompare.com Car Insurance commented: “This is a good move by the ABI. We need a complete review of the way renewals are handled currently so that consumers feel more in control of the process. Many insurers will automatically renew your insurance unless you contact them to tell them otherwise, and their renewal letter will focus on the convenience of needing to do nothing at all in order for your insurance to continue.
“Therefore, beyond just providing customers with last year’s premium, we need to ensure the focus is on a proper review of the customers’ situation rather than an assumed auto-renewal. The options at renewal should be clearly presented and the tone and the language used should reassure consumers that any changes or a switch to another insurer will be handled quickly and willingly, and in a joined-up fashion.
“For example, at the moment, if you do decide to switch insurers to save money, the onus is still on you to contact your old insurer in good time to advise them that you wish to cancel your policy when it expires. If you don’t get in touch they may renew your policy using an existing direct debit and you could face a cancellation charge when you realise you’ve got two policies in force.
“Getting customers to renew is key for insurers in terms of improving their profitability, as they incur far fewer costs with a renewal, compared to acquiring new customers. However, getting the best deal on your insurance is absolutely key if you are a customer – and these two priorities seldom sit comfortably together.”
Notes to editors:
On 20th February 2014, Vision Critical conducted an online survey among 2,000 randomly selected British adults who are Springboard UK panelists. 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.
* There are 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 = 8.8m drivers.
** Based on independent research by Consumer Intelligence during 1st April 2014 to 30th April 2014. 51% of consumers could achieve a saving of up to £225.09 with Gocompare.com car insurance.