It has been said that in the UK, we are spending £1.3 billion each year more than what we need to, just by having our car insurance set to automatically renew.
There are around 30 million of us holding a UK driving licence, and with many of us having busy lifestyles and long working days, that figure could continue to grow. Not ideal, especially when many of us need to count every spare penny.
So how does the auto-renewal process work?
Well, let us try to outline it for you. When you take out a car insurance policy with a new insurer, many will automatically put you on an auto-renew policy, which means that your policy will renew itself every year, unless you state otherwise, and chances are unless you read the small print of your new policy you won’t realise you have an auto-renew policy at all.
Ok, so we suppose this does have its benefits – removes the risk of you forgetting to renew and being accidently uninsured and it cuts out a job in our busy lifestyles, however, many driver’s aren’t aware of this little note in their policies, and given the choice, would we really want to be on the auto-renewal list anyway?
So why could should this be an issue?
For many of us, it simply may not be an issue, but, out of the 6 million or so of insurance policy holders being automatically renewed each year, how do many of us know we aren’t going to have a better deal by shopping around? The simple answer is if we don’t look we’ll never know.
By shopping around it not only allows us to see what deals are offered by insurance companies for being a new customer, but it also allows us to open up our eyes as to how much more we can get for our money. When your car insurance is set to auto-renew, there is no guarantee that the insurer will aim each and every year to offer you the best price for that policy.
When you bought the car you insure, did you see the first one for sale and buy it? No, you most likely looked at different cars, took them for test drives and thought about things like the number of doors that suited your lifestyle better, as well as the overall condition of the vehicle for the money is was advertised for.
Well, shopping for your insurance is just the same. It’s a competitive market and with many insurers looking to get the sale, you could find yourself with a great deal.
Do you really not need to do anything?
We are probably all guilty at some point of opening our renewal documents and seeing the “You don’t need to do anything” line, so we put the documents to one side and carry on with the policy auto-renewing itself and trusting it is all done with our best interest at heart.
Reading through the documents can be, for many, time consuming, confusing, and with many of us thinking that we know our circumstances haven’t changed in 12 months, to go online and compare insurance quotes is simply too much of a task for us to do.
But do we really not have 10 spare minutes every year to read through our policy renewal and check that our quote hasn’t rocketed or that we are being seen as a loyal customer for sticking around for another insurance period?
So what should we do to get the best price?
It’s simple. Even though you may stay with the same insurer because your renewal quote seems the best option for you, it is worth shopping around just in case.
With companies offering such deals as new customer discounts, and even online discounts, by shopping around each year and changing insurers each year, you could dramatically see annual decreases in your insurance premiums.
You may decide to tell your insurer from day one that you “do not wish to be on the auto-renewal list” as it may more than likely be the case that they won’t ask you, they may just enrol you on it. It could also be of benefit to you to keep your renewal documents from the previous year for cross referencing how your policy has just in 12 months.
If you feel any of your renewal documents are in any way confusing, never be afraid to call you your insurance provider to ask them to run through the renewal with you.
Even though being on an auto-renewal list could be satisfying for some, surely there is nothing more satisfying than having more money in your back pocket?
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