The cost of auto renewal
Of course auto renewal offers customer some sort of peace of mind. You’re not going to find yourself uninsured because you forgot that your renewal date was upon you. That much is true, but what price though would you be prepared to pay for this bit of admin?
We found that 8% of third party fire and theft policies and 6% of comprehensive policies charged an admin fee simply for renewing your insurance policy. We’re not talking just a few pounds in some cases either, fees of up to £50 could be charged.
- Existing customers pay more
Insurance is a competitive place and insurance providers are always looking to take new business from their rivals. To do this they sometimes lower their first year premiums to tempt in new customers. That means loyal customers, or those who simply auto renew for convenience, might be the ones paying the highest prices.
Some good news now, the law is going to be changing in this area.