Drivers are wasting an estimated £1.9 billion a year by allowing their car insurance to auto-renew. That’s the warning ahead of the September peak in car insurance renewals.
Around a fifth (21 percent) of motorists allowed their insurance policy to auto-renew in the last six months. This compares with 15 percent when the survey was last completed in February 2020. This is a 40 percent increase in the number of drivers auto-renewing their insurance.
The number of motorists auto-renewing without shopping around for competitive quotes is at its highest since February 2017.
When asked why they allowed their policy to automatically renew, a fifth of drivers said their existing provider was the cheapest last year, so they believed they would offer good value. Another fifth said they spoke to their insurance company about reducing their payments or taking a premium holiday.
Other reasons for sticking with the same provider included loyalty (22 percent), the hassle of switching (17 percent), and worries over the loss of their no-claims bonus (11 percent).
Less than half of drivers check their renewal premium against what they paid for cover the previous year. Just a third check their renewal documents for any changes to the cover they were offered.
Circumstances change, so a reduction in the annual mileage, adding or removing additional drivers, or a change in occupation could have an impact on the cost of insurance.
Paying a ‘loyalty tax’
Lee Griffin, CEO and founder of GoCompare, said: “September is traditionally one of the busiest months for renewals due to historic new car sales.
“Our research show that millions more drivers are not actively engaging with the renewal process this year, potentially leaving themselves hundreds of pounds out of pocket by effectively paying a ‘loyalty tax’.
“Drivers who are still paying their premiums really need to carefully consider their options and shop around to see what other insurers are willing to offer them.
“The good news is that car insurance premiums are falling due to less traffic on the roads and fewer claims. As a result, some drivers may actually see a premium reduction on their renewal letter, however that is the signal that they could probably get an even better deal elsewhere.”
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