We all know that we should shop around when it's time to renew an insurance policy, yet things can often get in the way. As a result, many consumers simply renew without thinking about it, but this can often mean they spend more than they need to, when in reality they could save hundreds of pounds by going elsewhere.
New figures from research group Consumer Intelligence show that drivers and homeowners can save up to £100 each year by switching providers, potentially cutting their car insurance bills by an average of £63 and their home insurance premiums by £37, simply by shopping around at renewal.
That's only if they switch after the first year, too. The figures went on to reveal that those who switch after a longer period with the same insurer could make even bigger savings: the savings generally ramp up with every year you've stayed with the same provider, which means drivers who've been with the same insurer for more than nine years can save £116, while householders can save £127 by switching, adding up to an annual saving of £243.
Happily, new rules that have just been brought in by the Financial Conduct Authority (FCA), the UK's financial regulator, should make the process of comparing insurance policies slightly easier. Since April, insurers have had to include the previous year's premium when asking customers to renew, so if the price has gone up, you'll instantly be able to see how much loyalty could cost you – which will hopefully encourage more people to shop around for new car and home insurance quotes.
It's hoped that this could change insurers' policies, too, ideally making sure they offer better prices to loyal customers: Consumer Intelligence's survey data shows that 89% of consumers believe insurance companies give their best prices to new customers, while 52% think that having to publish the previous year's price along with the renewal will encourage them to give loyal customers better deals instead.
"It is always the best policy to shop around at renewal and make sure you have the best cover at the best price," said Ian Hughes, chief executive of Consumer Intelligence. "Those that do so are better off over time."
The jury's still out on whether or not the new rules will have an impact, but the figures clearly show that those who stay loyal to insurers risk overpaying for cover, highlighting the need to shop around every single year. So don't renew without seeing what else is out there! If you're coming to the end of a car or home insurance policy (or indeed anything else), check out our insurance quote tool and see if you can get a better deal.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.