New analysis of trends in the car insurance industry finds nearly half of UK drivers still allow their policy to renew automatically.
Some 47 percent of drivers let their car insurance policy continue unchanged during 2024: a slight fall from 52 percent in 2021.
However, the penalty for such loyalty – or convenience, perhaps – is a collective total of £560 million in higher renewal premiums.
On average, the cost of a car insurance policy increased by £82 year-on-year, despite rule changes intended to stop ‘price walking’.
Insurance renewal costs remain high
In 2022, the Financial Conduct Authority (FCA) introduced new regulations to try and prevent insurance companies charging existing customers more than new ones.
Despite this, average renewal costs are now higher than before the FCA’s new rules were brought in.
The average cost of a comprehensive policy in the UK now stands at £635, down slightly from a peak of £650 in late 2024.
Car insurers are now required to show the previous year’s premium price alongside the quote for renewal. Close to half of drivers surveyed said they did not notice this information, highlighting the lack of attention being paid at renewal time.
Take five minutes to shop for savings
Chris Richards, car insurance expert at SimplyQuote, said: “The FCA reforms have stopped the worst renewal mark-ups, but they can’t stop people ignoring their renewal emails”.
Just under a third (30 percent) of UK drivers said they shopped around at renewal time, but opted to stay with their current insurer. Around 15 percent said that switching takes too much effort, while one in five (20 percent) believed there are no savings to be made from changing insurers.
Insurance industry analysts believe this year will see only modest reduction in premium costs, with no major falls expected.
“Drivers can’t assume the system will save them money,” added Chris Richards. “The only real protection against overpaying is taking five minutes to check your renewal quote. If you haven’t done that, you’re almost certainly paying too much.”
ALSO READ:
How to save money on car insurance
Car theft: what to do if your vehicle is stolen
Parking rules explained: where is it illegal to park your car?
