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Is it time to stop your home insurance auto renewal?

Auto renewal on your home insurance might seem like a sensible thing to have in place. Think again… 

The financial watchdog, the Financial Conduct Authority thinks consumers could save £64-103 million per year if insurance providers encouraged their customers to shop around for the best deal at renewal, rather than auto renewing.

And if that’s not enough of a reason, here we’ll look at some other reasons why it might be a really good idea to stop auto renewing.

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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?

  • Fees

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.

A house in london

Changes in the law

At the moment, insurance providers don’t need to tell you what your old premium was when they send you a renewal letter. That means that unless you have your old policy to hand or you have a really good memory, you’ve no way of knowing whether your renewal is increasing.

The Financial Conduct Authority has looked into the matter and has now ruled that from April 2017 insurance providers will have to say in their renewal reminders what you paid last time.

So you’ll be able to see whether your premiums are going up, and by how much.

This applies not just to home insurance but also to car, pet and health insurance.

What should you do?

Compare! Well yes we would say that wouldn’t we, but then we do know that by doing so you’re likely to save money.

More than half of our customers could save over £65** a year by comparing home insurance prices, with 10% saving almost £200 a year. *** Not bad for something that costs you nothing !

Auto renewal could be an expensive way to buy your home insurance. If you want the right deal for you, use our home insurance comparison service to see how much you could save.

** Based on online independent research by Consumer Intelligence during May 2016. 50% of consumers could achieve this saving on their Buildings and Contents insurance with comparethemarket.com

*** Based on Online independent research by Consumer Intelligence during May 2016. 10% of consumers could achieve this saving on their Buildings and Contents insurance with comparethemarket.com.