When car insurance renewal time comes around, many of us simply sign on the dotted line and stick with whoever our chosen insurance company is for another year, paying little attention to the details or any changes in price or policy.
However, it is this type of mental disengagement which is playing directly into the hands of insurers. So before you blindly sign yourself up for another year’s protection, read through our car insurance renewal advice below. It could end up saving you money and help you get a better deal on your next policy!
The Easy Option
Renewing your policy is of course the easiest option, which also explains why so many people do it. For instance, even finding the previous year’s paperwork can be difficult, so you may not even know exactly what you were paying to start with. By the time the renewal document arrives, you just want to get it out of the way.
Luckily for consumers, a law change which came into effect on April 1st means insurers are now required to show how much you paid for your previous policy on any car insurance renewal documents they send out. By extension, this will also show whether the price has increased, and by how much.
The hope is that this will encourage consumers to shop around and compare car insurance prices from a variety of providers. It should also promote more competition amongst insurers, as more people begin to shop around in search of a better deal in their car insurance.
Pay All Upfront
Research has also shown that if you pay for your car insurance policy up front, you will save money on the price of the premium versus paying in monthly installments. A new survey revealed some motorists are paying a staggering 20% more for making monthly payments, compared with motorists who can afford to pay a year in advance. Meaning it could be cheaper to take a loan to pay insurance upfront, as the bank interest rates will be lower than the insurance ones.
A spokesman for the Association of British Insurers (ABI) said:
“Customers paying for their car insurance in monthly installments are effectively taking out a loan for the cost of the cover and paying it back over 12 months, which means they incur interest and generally pay a higher total bill.”
Some insurers offer quarterly payments, which may be more manageable with your budget.
It is important to remember to not be seduced by a lower premium price. With such high competition today, whilst some insurers will try to undercut each other, do not sacrifice important policy features for the sake of a few pounds. Always check the policy carefully to ensure you have all the cover you need.