Car Insurance Renewal: Should You Auto-Renew or Switch?
Throughout the year, we have a lot to organise and think about, so it’s no wonder that thousands of drivers forget about their car insurance renewal date.
Sometimes, auto-renewing with your current insurer can be the most convenient way of making sure you’re covered and driving legally on UK roads, but it’s always a good idea to check when your renewal date is, make a note of it and compare quotes online a few weeks before to see if you’re being offered the best deal and discover how much money you could save by switching providers.
More often than not, motorists who automatically renew their policy are generally subject to a type of loyalty tax for not switching, so they are generally charged more than new customers who tend to get offered the best deals on the market.
In this guide:
Generally, yes. When you purchase cover, it is likely that your policy will automatically renew the following year on the same date that you purchased it (if you bought annual cover) – unless your provider tells you – or you tell your provider - otherwise. Unfortunately, in most cases, they will renew it at a higher premium than the previous year.
Car insurance companies have to inform customers about their automatic renewal policy when they initially take out cover with them, so if you’re unsure about your renewal date, make sure you contact your provider to ask.
It is completely legal for your insurer to renew your policy, provided that they told you about it when you took out cover with them. According to GoCompare, if you have been with them for four consecutive years, the insurer must encourage you to shop around to ensure you’re getting the best deal and being treated fairly.
Car insurance renewal notice period – When do you get your renewal letter?
If you don’t know when your car insurance auto renewal is, you can either get in touch with your provider to find out or wait for them to inform you about it around 21 days (three or four weeks) before the renewal date.
When you get your renewal letter, it must include the price you paid for cover the previous year, so that you are able to clearly see the difference in cost (a rule set out by the FCA in 2017).
This 21-day window gives you plenty of time to shop around and compare quotes to see if you’re paying too much for cover. If you find a better deal elsewhere for exactly the same level of cover (or more), you will need to let your existing provider know that you want to switch so that they don’t auto-renew your policy; if you can’t find a better deal then you may wish to stay put until the following year.
If you don’t know when your car cover is ending or when you’ll need to arrange your next policy, there are a few things you can try to find out:
- Contact your insurer directly to enquire about your policy details – If you’re not sure who your provider is, read our guide: How to Find Out Who Your Car Insurance is With.
- Check your emails to see if you have been sent any information about your policy from your provider or the comparison site you used to purchase the policy.
- Check your bank records to identify when you last paid for car insurance.
By trying one or more of the above, you should find more information regarding your policy and the renewal date.
If you’re unsure whether or not your vehicle is insured at all, however, one of the easiest ways to check your insurance status is to use the Motor Insurer’s Database (MID), which you can easily do on the AskMID website. You can check if your vehicle is insured for free, but if you require further details about your policy and insurer, you’ll have to pay a one-off fee of £4.
Remember, if you discover that your vehicle is not insured, do not drive it until you have purchased sufficient cover. The police can easily detect uninsured cars and there will be penalties for those driving without insurance, so it really isn’t worth it.
Learn more: Checking Your Car Insurance with AskMID
If you want to stop your car insurance renewal, you will need to contact your insurer directly to explain that you no longer wish to renew your policy with them and that you want it to be cancelled after your current policy’s end date.
As always, your insurance company will want to know your reasons for not wanting to renew with them – whether it’s due to the fact you’ve found a cheaper quote with someone else or you’re not impressed with their services.
The company you’re leaving will not want to lose you as a customer, so they will probably do their best to keep you. If they can offer you the same deal as the one you found elsewhere, or an even better deal, then you may wish to stay with them, which is fine! Just make sure that the cheaper price offers exactly the same level of cover (unless you need more – this depends on your personal circumstances).
By cancelling your renewal, you won’t be charged any cancellation fees because you are not ending the policy early – you are simply asking not to purchase a policy with them once your current one expires.
Read more: Can I Cancel My Car Insurance?
Car insurers are not permitted to automatically renew your policy without letting you know first, so if their automatic renewal policy is not stated in your original insurance policy document, or if they didn’t get your consent about this first, they should not auto-renew it by law.
Every insurer has its own terms and policies, so if your car insurance has automatically renewed when it shouldn’t have, you will need to ask them about their cooling-off period – which companies are legally expected to offer to customers.
Generally, companies have a 14-day cooling-off period during which you can cancel your policy without being charged. Once this cooling off period ends, you cannot cancel the policy without incurring a fee.
In some cases, an insurance company may refuse to offer a renewal quote to particular customers due to a few potential reasons.
They may refuse your renewal because:
- The criteria for your policy has changed
- They are no longer able to provide you with that cover
- You have failed to disclose certain information (which will void/cancel/invalidate your policy)
Generally, insurers will inform you of the reason why they’ve refused your renewal. If you’re not sure why your car insurance hasn’t been renewed, contact your insurer directly to ask them why. If you are refused insurance for whatever reason, you will have to declare this when you next take out insurance – which may increase your premiums depending on your situation.
Learn more: The Average Cost of Car Insurance UK
Should I auto renew my car insurance? – The pros and cons
While many motorists are happy to renew their policy with their insurer year after year, there are many others who make sure they switch annually to save on cover.
Why? Because there are both advantages and disadvantages to auto-renewing with your car insurer, so it all depends on what will work out to be the best for you.
- You don’t run the risk of your policy expiring and driving uninsured
- You can continue to make use out of your company’s great services if you are satisfied
- Your insurer may offer you a better deal for being a loyal customer (but you will probably need to ask first)
- No need to spend time comparing quotes
Even if you intend on staying with your current insurer, you may still be able to save on cover by comparing quotes online. If you find a cheaper deal than the one you’re currently on, you could inform your insurer and if they want to keep you as a customer (which they probably will), they will hopefully match it or offer you better. If they can’t do this, then you’ll be better off financially if you switch.
Drawbacks of auto-renewing
- You could be missing out on big savings by not switching (loyal customers tend to pay higher premiums than new customers who usually get offered attractive deals)
- You could be offered other incentives and benefits with another company
- Your existing cover may not be sufficient, depending on changes to your driving habits (mileage, driving needs, working from home, etc.)
- You avoid switching out of fear that you’ll lose your no claims bonus/discount (NCB/NCD) – but this isn’t true. When switching, all you need is proof of your NCD from your previous provider.
Remember, whether you choose to stay with your insurer or switch to another provider, it is up to you. Generally though, we always advise drivers to switch if they’re guaranteed to save money for exactly the same level of cover.
If you want a guarantee to beating the cost of your next car insurance renewal, the best way to save money is to compare quotes offered by a range of providers in the UK.
To do this, you can use one or more comparison sites (each one may differ so it’s best to use a few) or you can contact companies directly (especially ones not on comparison sites) to help you compare deals and find the best one for your needs and budget.
For more tips on how to save on cover, read our guide: 10 Tips for Cutting the Cost of Car Insurance.
To compare quotes at no cost and under no obligation, simply tap the button below to get started:
Alternatively, check out our related guide for further advice and help.