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. 

Daniel Hutson From the Motor team
5
minute read
posted

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 could face 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. It’s also worth following up in writing just to be sure.

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I’ve received my renewal letter - what should I do with it?

Although you should get notice three or four weeks before your policy ends, 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 £274* on their car insurance premium, while 25% found they could save as much as £659**.  

*Based on Online independent research by Consumer Intelligence during May 2018, 50% of customers could save up to £274 on their car insurance premium.  

**Based on Online independent research by Consumer Intelligence during May 2018, 25% of customers could save up to £659 on their car insurance premium.

Can insurance providers auto-renew my policy?

Yes, they can – and they can 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 consumers can see the difference in cost.

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What happens if I renew my car insurance then decide to cancel?

By law, you have 14 days to change your mind. The 14-day ‘cooling-off’ period starts from the day cover begins or from the day you receive your paperwork – whichever is later.  

If you decide to cancel during the 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. 

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?

We all like saving money, especially on things that aren’t fun. So, to give you a helping hand, here are some tips on how you might drive down the cost of your car insurance:

  • act quickly – our research found you could make great savings by renewing three weeks before renewal, 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
  • named driver – 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
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  • increase your voluntary excess – if you increase your voluntary excess, your premium will usually reduce. Just make sure you can afford the full amount of both the voluntary and compulsory excess should you need to make a claim
  • accurate mileage – try to be accurate when working out your annual mileage because overestimating could bump you into the next price bracket.

Why should I compare car insurance?

Comparing car insurance with us is a quick, easy and hassle-free way of finding the right policy to suit your needs and 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 up for renewal, compare and see if you could save.