Car insurance isn’t one of the most exciting things in life and when the renewal letter comes, it’s all too easy to just go with the same deal, with the same provider, for whatever price they’ve quoted. Because let’s face it – who can be bothered to find the paperwork with last year’s premium on it?
But consumer apathy is one thing that the FCA (Financial Conduct Authority) is very keen to put a stop to. Which is why any renewal letter you receive from the 1 April onwards, will detail exactly what you paid for your previous policy. The point is to make it abundantly clear if your renewal price has increased, and if it has, then by how much. The FCA hope that it’ll encourage more consumers to search for a better deal and in turn promote more competition amongst insurance providers.
That’s all well and good, but will the changes really make you any more bothered than you were before? The FCA genuinely seems to think so (it’ll certainly mean less rummaging around for old paperwork) and the new rules are the result of some painstaking trials.
Back in 2014, the FCA trialled various ways to get customers to switch their car insurance and they found that clearly stating what people had paid last year versus the renewal price had the biggest impact. The results showed that between 11% and 18% of people switched insurance provider, or successfully negotiated a lower renewal price with their existing one. Other methods they looked at included text messages, emails and letters – which, if we’re honest, probably just got deleted, ignored or ended up in recycling.
But it doesn’t stop there, the FCA have also said that insurance companies and price comparison websites need to make it clear to customers that when it comes to comparing packages, it’s not just price that’s important, but also the nitty gritty of what’s being offered. After all, it’s all very well having your head turned by a low premium ; but it’s not such a bargain if it doesn’t include the optional extras that you want, or had included last year.
The changes might not sound like a big deal – especially if you’re one of those super-duper organised people that can lay their hands on every single piece of paperwork since the start of adulthood. But for the rest of us, it’s a step towards really making us think about whether the car insurance deal being offered, is actually a good one.
And if you’re still a bit doubtful as to whether a letter giving you a then and now price will really make you look for a better policy; then how about the fact that half of our customers saved up to £274* when they did just that and simply compared the market. But that’s not all, more than a quarter of you could save an average of £659** and if you’re in our lucky top 10% then you could be up to £1,439*** better off. So, go on, next time that renewal letter flops through the letterbox, do something about it – Compare the Market and see what you could save.
*Based on Online independent research by Consumer Intelligence during May 2018 50% of customers could save up to £274.51 on their car insurance premium.
**Based on Online independent research by Consumer Intelligence during May 2018 25% of customers could save up to £659.12 on their car insurance premium.
***Based on Online independent research by Consumer Intelligence during May 2018 10% of customers could save up to £1,439.55 on their car insurance premium.