Motor car insurance policy holders that choose to remain loyal to their insurers by automatically renewing their annual cover are paying through the nose, as industry experts say car insurance companies feel no obligation to reward this loyalty with competitive prices.
The practice is prevalent not just in the discount car insurance industry but also in the travel and home insurance markets, consumer groups say, and incensed drivers and home owners have begun to call for change. Insurers need to be strong-armed if need be into giving their loyal customers more competitive pricing, they say, while also making it easier for these same customers to see how their new annual premium differs from their previous one in order to allow them to make informed decisions regarding their cover.
Insurance providers will habitually offer new customers heavily discounted rates in order to attract their custom. However, these same deals are never offered to the industry’s loyal customers, with the result being that motorists willing to jump ship to a new provider can save nearly £530 on their annual premium prices, according to recently released research figures from the AA.
Insurers are simply attempting to exploit the inertia of their customers instead of rewarding their loyalty, according to a Which? spokeswoman. The consumer group called upon the industry to allow customers to see how much their new premium price may have gone up by being shown their new premium alongside last year’s quote, adding that even when your new annual premium price has only increased modestly, it’s still worth contacting your insurer and giving them the business.