Snoozing is losing when it comes to insurance renewals

The main gripe you report when it comes to insurance renewals is that loyalty isn’t always rewarded. Some insurers will put your rates up in the second and third years, even when you haven’t made a claim. Meanwhile, new customers are offered rock-bottom premiums.

One Which? member expressed his frustration at the perception that customer loyalty isn’t acknowledged ,or welcomed, by insurers:

‘What is wrong with encouraging loyalty and saving all the extra advertising and switching costs?’

Automated renewal if the deadline passes

Automatic renewals are another area of contention for car and home insurers. While desirable for some time-pressed people, there’s a feeling that they can catch out the more disorganised of us with large premium hikes.

‘The whole process is tedious and when the policy tends to double in year two, you’d be mad not to shop around. As they renew it automatically if you do nothing, I can see how they make money from people who are busy.’

The Financial Conduct Authority (FCA) agrees that there’s a problem here and is looking into this market. The regulator is particularly concerned with ‘differential pricing’, ie better rates for new customers than existing policyholders, and the use of auto-renewals.

The idea of insurers being compelled to put last year’s premium rate on the renewal letter, which we’ve advocated for a while, is one recommendation being looked at.

Insurance renewals still an issue?

We’re scoping out some new research into insurance and auto-renewals  and would value your input. Do you believe there’s real detriment in this area or it is ‘just the way that it is’?

It may be that you think people that don’t query their rate deserve what they get and cheaper prices should be the preserve of the ‘informed hagglers’.

How much money have you saved by being a bit canny when your renewal notice drops onto the doormat?