MoneySuperMarket has revealed that homeowners are collectively wasting £37 million annually by allowing their home insurance provider to automatically renew their policy.
26% of homeowners with buildings and/or contents cover automatically renewed their policy with their existing provider and almost two fifths (39%) saw their premiums rise as a result.
54% of those with buildings and/or contents cover chose their current provider because they offered the cheapest deal when they took out the policy. But for those who automatically renewed, premiums rose by £9 on average. If those customers shopped around at renewal, they could see savings of £592 each or £243 million collectively.
Kevin Pratt, consumer affairs spokesperson at MoneySuperMarket, said: “Insurance companies trick loyal customers into sticking with them– but with higher premiums – through confusing renewal letters and notices, whereas new customers are offered great rates to get them through the door. If this happens year on year, loyal customers can end up paying hundreds of pounds more than they need to.
“When it comes to insurance, the message is clear: loyalty doesn’t pay.”
When renewing their home insurance, only 15% of policyholders looked around for other quotes before negotiating with their existing provider to get a lower price. 26% did not shop around for cheaper quotes.
Pratt added: “Home insurance premiums fell to a six-year low in April, and prices are now at their lowest since 2010, standing at £109 on average for combined buildings and contents cover. Customers who auto-renew are not benefitting from these competitive prices, though – they are reserved for those switching providers.
“As a nation, we spend over £37 million more than we need to because so many home insurance providers renew their customers’ policies automatically – that’s money we can’t afford to waste. There are savings of up to £59 per household to be made by shopping around and switching providers, rather than letting insurers get away with it.”