Warning: Automatically renewing your home insurance could cost your dearly
UK homeowners could be collectively wasting a mammoth £37m a year by allowing their home insurance provider to automatically renew their policy, according to research from moneysupermarket.com.
The comparison site revealed that a quarter of homeowners with buildings and contents cover automatically renewed their policy with their existing provider, but 39% saw their premiums rise as a result.
Tax on loyalty
Over half (54%) of homeowners with buildings and/or contents cover opted for their current provider because they offered the cheapest deal at the time. 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.
Kevin Pratt, consumer affairs expert at moneysupermarket.com, 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.”