Sticking with car insurance costs drivers £1.7 billion

Drivers who stick with same car insurance year after year are paying a cash penalty for their loyalty.

Many motorists stick with their insurer for three years or more, according to figures from comparison sites.

But they pay a high price for their loyalty by paying around £1.7 billion a year on premiums they could keep in their bank accounts by shopping around.

They also lose out on perks like courtesy cars, breakdown insurance and discounts by renewing their policies without checking out other offers.

Some insurers also make as much money out of referral fees when a driver has an accident as they do from insurance premiums.

Admiral is reckoned to have made £147 million last year for passing motorist’s details to personal injury lawyers and claims management firms. The insurer remains defiant that the practise will continue despite criticism from MPs and consumer groups.

The upshot is loyalty certainly does not pay for motorists looking for good value, cheap car insurance.

Sticking with the same insurer means paying up to 10% more a year – which can easily add up to £250 or more in a year for younger drivers.

The easy way to shop around is to feed the details off the renewal quote provided by your current insurer in to a car insurance comparison site.

Be sure to check out more than one comparison site as not every company advertises on all the sites – and some don’t offer cover through them at all.

An easier way is to scan and email the renewal quote to a ‘whole of market’ broker, who will research the best cover for you and come back with some options.

Make sure your broker is independent – banks and other ‘tied’ brokers can only give information about their own products or those from a limited range of providers.

Consumer champion Which claims 85% of motorists do not shop around for a more competitive quote on renewal – and car insurance companies price this into the offer.

“The discounts and special offers are aimed at catching the attention of the 15% of motorists changing insurers every year,” said a spokesman.

This entry was posted in Car Insurance. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *