A recent national news story has highlighted that UK drivers may be paying up to 16% over the odds when they renew motor insurances. It’s quite common for British drivers to process auto renewals on their motor insurance, but this could result in annual overpayments totalling around £1.4bn. As it’s important to shop around for the best deals, the Financial Conduct Authority put some measures in place in April 2018 to help motorists realise how much they could save by shopping around, but auto renewal is still a popular choice.
The UK’s Financial Conduct Authority (FCA) have now put rules in place forcing insurers to offer motorists greater transparency and more information at the time of renewal. Even so, a lot of drivers are missing out on better rates for motor insurance because they fail to shop around different suppliers.
All renewal documents have to show details of the previous year’s premium now and offer motorists encouragement to look around before auto renewing. Although many drivers have noticed these details on renewal documents, auto renewal is still commonplace. Around 46% of motorists now say they did see information about their previous year’s premium on their renewal letter and a third of motorists recollect their insurer encouraging them to shop around for better deals. However, this did not stop about 16% of motorists from auto renewing.
Georgie Frost is a consumer advocate at GoCompare and she said: “It is certainly good news that more motorists are seeing this important information on their renewal letters, and our research gives the first indication that the FCA’s initiative could be starting to make a difference. However, it is early days and we have to keep these results in perspective.”
It’s estimated that drivers waste up to £276 a year by auto renewing their motor insurance, the average driver staying with the same insurer is likely to see price hikes of up to £50. Young drivers can find it’s even more important to shop around for the best motor insurance deals as costs can vary considerably