If you own or drive a car, your current motor insurance expires sometime this year. When the renewal letter drops through your letterbox, you are almost certain to be greeted with the unwelcome news that you are going to be paying more.
Citing figures released by the Association of British Insurers (ABI), a story in the Guardian newspaper on the 27th of January 2018, revealed that the average cost of motor insurance has increased by 9% (to an annual price of £481) in the past year and further increases are expected during 2018.
In a parallel survey conducted by the AA, the average price quoted (a figure which tends to be higher than that actually paid) was higher still.
At first sight, it might seem that there is little you may do to avoid paying more for your motor insurance – if you are going to drive, you have a legal obligation to have it. If you break that law, you face the prospect of an unlimited fine, disqualification from driving and the possible impounding and destruction of the uninsured vehicle.
Car insurance renewal
But there is something you may do about getting cheap or cheaper cover – and that opportunity comes when it is time for your car insurance renewal.
As your current car insurance renewal date approaches, make sure you seize the chance to shop around and compare car insurance deals to make sure you are getting the cover you need at a competitive price.
Some people – especially those of an older generation perhaps – expect that their loyalty to a particular insurer is going to be rewarded with a more favourable view on the premiums charged in successive years. But this is by no means the case. Loyalty to the same insurer each year carries no such benefits. When your insurance renewal comes around, that is the time to shop around for car insurance once again.
But motor insurers have devised a number of ways to discourage you from doing just that. Instead, they rely on your taking the most convenient and seemingly safer path of just renewing the policy you already have. The risk of your motor insurance coming up for renewal and you forgetting to do anything about it, of course, might leave you driving around in an uninsured vehicle – and paying the high cost of breaking the law.
A report by the BBC highlighted the practice of some motor insurers who automatically renew your cover from one year to the next unless you have noticed it is due for renewal and you have advised them otherwise. If you do not, the price of any new premiums is automatically debited from your account. That price might not only be higher than that charged by other insurers, but more than you might have paid the same insurer as a new customer.
If the time for your annual car insurance renewal is coming up, therefore, the lesson is to make sure you are not caught out.
It is time to shop around for car insurance once again and to use comparison websites such as the one we offer here at Over 50 Choices, to compare over 50s car insurance deals from more than 90 different motor insurers.
Intervention by the Financial Conduct Authority
The less than transparent attitudes adopted by many motor insurers when it comes to annual car insurance renewal has attracted the attention and concern of the industry’s regulator, the Financial Conduct Authority (FCA).
The FCA introduced new rules, which came into effect on the 1st of April 2017, designed to raise consumers’ awareness of the issues surrounding car insurance renewal, improve insurers’ treatment of their existing customers and generally increase competition with the market.
Specifically, the new rules charged motor insurance providers with:
- stating the price of the previous year’s premium in any renewal notice, so that it could be readily compared to the price of the new premium being offered;
- positively encouraging consumers to review their current cover and to shop around for car insurance offering the best deal every time a renewal date comes around; and
- singling out those of their customers who had renewed a policy with them on four or more consecutive occasions and convey an additional message encouraging them to shop around for their motor insurance – this rule extended to customers who had already renewed their policy four times or more before the changes of the 1st of April 2017 came into force.
When shopping around for your motor insurance
By shopping around for car insurance and switching to a new provider when you spot a better deal, our own research has shown that the majority of customers may save up to £200 on what they pay each year.
When you compare car insurance deals that are available, remember that you are looking for the cover that suits your particular individual needs and circumstances:
- these may change from one year to the next and, even if you decide to stay with the same insurer, avoid renewal notices which ask a question in such general terms as “has anything changed in the information you provided in your proposal form” – start each renewal from scratch;
- make sure you notify the insurer not only if you have changed cars, but also whether it has been modified in any way or if you have improved its security;
- is the level of excess still suitable – do you want to change the amount of voluntary excess to which you previously agreed;
- has your full no claims discount been taken into account by your existing insurer or any new one to which you are thinking of switching;
- consider paying the full, annual insurance premium up front – rather than incur the cost of credit involved in paying by monthly instalments throughout the year;
- do you still need, or do you want to add, optional extras such as windscreen replacement cover or breakdown and roadside assistance.
When this year’s car insurance renewal comes around, therefore, don’t get caught out into paying over the odds for your cover – still less, run the risk of forgetting about it altogether and driving an uninsured vehicle.
Make sure to shop around for your car insurance in good time before automatically renewing the policy you already have.