More than half of UK drivers could be paying between £25 and £100 too much for their insurance because they failed to carry out one simple check, according to new research.
Analysis by MoneySuperMarket found that drivers who didn’t shop around for their insurance saw their premiums rise by an average of £49, although more than one in 10 saw rises of up to £100.
It found that last year 52% of drivers simply allowed their policy to auto-renew - the equivalent of 17 million motorists. That’s up from 41% who let their policy roll on in 2020.
Insurers are now obliged to include the previous year’s premium on all renewal quotes so drivers can see if they are being charged more but despite this almost half (48%) of drivers said they hadn’t spotted this, resulting in them overspending by a collective £830m.
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Changes which came into force earlier this year are designed to end this “loyalty tax” by forcing insurers to offer existing customers the same deals as they offer new customers. While this stops insurers offering a cut-price deal one year then ramping up a customer’s premium the next, it is thought it has actually led to a rise in costs as insurers have stopped offering special introductory prices.
Sara Newell, car insurance expert at MoneySuperMarket, commented: “Last year more drivers renewed their car insurance with their existing provider than did not. With motorists reporting average premium increases of £49, this means that collectively, UK drivers overspent on their premiums to the tune of an estimated £830 million.
“While we have seen the introduction of the FCA’s new rules on price walking – which are intended to level the playing field for consumers – it’s important that drivers don’t rely on such measures to reduce their premiums.
“We’ll monitor the impact of the FCA’s new measures over the coming months but the fact remains that shopping around is always going to be the most effective way of keeping your costs down.”
According to the comparison site’s research, of those who allowed their policy to auto renew, a quarter shopped around but stayed with their existing provider for ease while 14% believed that changing car insurance provider took too much time or effort, and nearly one in five (19%) didn’t think they could make worthwhile savings.