Should I auto-renew my car insurance?
Should I auto-renew my car insurance?
By taking the easy option of auto-renewal you could be losing out on savings on your car insurance premium. Here are our tips on how to break the auto-renewal habit.
What is car auto-renewal and how does it work?
Auto-renewal is when your car insurance provider rolls your policy on from one year to the next. Whether or not your policy auto-renews depends on the terms set out in your policy. Don’t just assume your car insurance is automatically renewed every year, because if it’s not, you could potentially find yourself driving without insurance.
If your provider does offer an auto-renew quote for your policy, they’ll usually send you a letter around three to four weeks before the renewal date. This gives you time to decide whether you want to stick with your provider or switch to a new one. The renewal letter will also include the previous year’s price, so you can see if there’s any difference in cost.
You’re not under any obligation to renew your policy with your existing provider. But lots of us do, simply because it’s less hassle. Just be aware that you could be losing out on potential savings.
How do I cancel my car insurance renewal?
Let your insurance provider know you want to cancel your policy before the renewal date. If you tell them after this, you might have to pay administration fees.
You should follow any instructions on cancelling your car insurance, which will be set out in your contract.
Some insurance providers require written confirmation by letter or email, while others will cancel by phone. If you cancel by phone make a note of the time, date and the name of the person you spoke to.
I’ve received my renewal letter. What should I do?
You should get your renewal letter three or four weeks before your policy is due to end, but check the renewal date just to be sure. This is your opportunity to shop around and find a better deal. By using our car insurance comparison service, 50% of customers found they could save up to £289** on their car insurance premium, while 25% found they could save as much as £730***.
**Based on Online independent research by Consumer Intelligence during May 2020 50% of customers could save up to £289.85 on their car insurance premium.
***Based on online independent research by Consumer Intelligence during May 2020, 25% of customers could save up to £730.94 on their car insurance premium.
Can insurance providers auto-renew my policy?
Insurance providers can auto-renew your policy and charge you whatever premium they feel is appropriate at the time of renewal. However, since the FCA (Financial Conduct Authority) ruling was passed in April 2017, all car insurance renewal letters must include the previous year’s price, so customers can see the difference in cost.
What happens if I renew my car insurance, then decide to cancel?
f you renew your car insurance, then decide to cancel during the 14-day cooling-off period, you’ll be refunded the cost of your policy minus any days it was active for. You may also be charged an administration fee. If this is the case, the amount should be clearly stated in the policy terms and conditions.
The 14-day ‘cooling-off’ period starts from the day your car insurance begins or from the day you receive your paperwork – whichever is later.
You can cancel your car insurance at any time after the 14-day cooling-off period. However, you may be charged a cancellation fee as well as an administration fee for any time the policy was active for. Be aware that these costs might cancel out any refund you may be entitled to.
How can I lower the cost of my insurance?
Here are some tips on how you might lower the cost of your car insurance:
- Act quickly: You could make great savings by renewing three weeks before your policy is due to end, rather than leaving it until the last minute.
- Invest in security: Installing an industry-approved alarm or immobiliser could help lower your premium. Talk to your insurance provider about a discount.
- Add a named driver to your policy: If you’re a new driver, adding someone with more experience and a clean driving record as an occasional named driver could help lower your premium. Just make sure they aren’t named as the main driver if this isn’t the case. This is car insurance fronting and is illegal.
- Increase your voluntary excess: If you increase your voluntary excess, your premium will usually reduce. Just make sure you can afford to pay both the voluntary and compulsory excess should you need to make a claim.
Why should I compare car insurance?
Comparing car insurance with us is a quick and easy way of finding the right policy to suit your needs – and it might even save you money.
Just because your insurance provider has an auto-renewal facility doesn’t mean you should feel pressured into accepting it. So, when your policy is next up for renewal, compare and see if you could save.Get a quote