Nearly six million motorists missed out on savings of more than £110 last year thanks to the curse of insurance auto-renewal.
The calculation has been made by a price-comparison service, which found that drivers are collectively chucking away £1.3bn simply by allowing their existing insurers to renew their policies.
According to Moneysupermarket, about a quarter of all motorists automatically renewed their policies last year without getting alternative quotes first. And of those drivers, nearly a third had not changed providers for at least five years.
Sticking with the same insurance company can be the right thing to do if it keeps offering you a competitive deal or if, for example, you have a classic car and rely on a specialist insurer. But even if you do end up staying put, you should always get some other quotes first to make sure your renewal price is a good one.
Moneysupermarket also found that renewal notices can be confusing because they often don’t include last year’s price, so it is hard to make a comparison. Meanwhile, the use of statements such as “You do not need to do anything” can coax customers into taking no action and automatically renewing their policies.
Dan Plant, of Moneysupermarket, said: “As our report lays bare, auto-renewal is far from fair, it reduces proper competition and ultimately it costs consumers big money.
“Often people have no idea that they’re agreeing to auto-renewal when they first buy their insurance policy, and would struggle to opt out even if they did.
“When renewal time comes around, the letter or email they get from their insurer can be confusing and misleading, and even bury significant changes to their policy.
“If you don’t want to renew your policy, cancelling can also prove difficult.”
The warning was echoed by another comparison service, Gocompare. It said its research found that fewer than half of all motorists even looked at their previous year’s premiums to see how they have changed, and a quarter of drivers have been with the same insurer for three years or more.
Matt Oliver, of Gocompare, said: “New registration plates are issued in March, making it the busiest month for car-insurance quotes and renewals.
“The car insurance market is fiercely competitive and insurers often offer better deals to new customers than for those renewing existing policies.
“So our advice is simple – even if your current insurer offered the best deal last year, you shouldn’t automatically assume that it will when your policy comes up for renewal.
“Use your renewal letter as a prompt to take action. Look at your renewal notice as soon as it arrives.”