Digging out your insurance paperwork and comparing deals isn’t everyone’s favourite part of owning a car - and therefore, many car insurance companies automatically renew your policy year-after-year.
The question is, how will you know if your provider’s going to renew automatically? What happens if you don’t like the renewal price? And, what happens if cover renews but you change your mind?
To make sure you get the very best deal for you, we’ve put together a quick guide that’ll help you get to grips with automatic insurance renewals – and make sure you stay in control.
Will my car insurance automatically renew?
Chances are, your current car insurance cover will automatically renew when your policy period comes to an end.
Well, insurance companies will generally say that it’s a convenience thing – and to some degree it is. After all, there are few people who enjoy getting insurance quotes and comparing the small print to find the most cost-effective cover.
The thing is, there’s another side to auto-renewing car insurance policies. In the past, some providers have used auto-renewals as a way of sneaking prices up – even if your details haven’t changed. According to one large comparison website, 4.6 million drivers allowed their insurance to auto-renew in 2018 – with meant they missed out on a collective saving of nearly £600 million.
There’s nothing illegal about insurance companies auto-renewing your policy – but if they do, they have to let you know they’re going to do it – and they have a responsibility to inform you that you could get a better deal if you shopped around.
So, can your car insurance renew automatically? Yes – but if it’s going to, your insurer must let you know.
My car insurance has automatically renewed – can I cancel?
Since most car insurance policies will auto-renew, it’s not uncommon for people to forget to take action when they get their renewal notice and find themselves with a deal they didn’t want.
As a result, the Car.co.uk team are often asked if car insurance can be cancelled after it’s renewed. The answer is yes – but you’ll have to act fast, or you could potentially find yourself out of pocket.
All insurance products are regulated by the Financial Conduct Authority (FCA) – car insurance included. Your FCA rights entitle you to cancel any insurance policy within a 14-day ‘cooling-off period’ – for any reason whatsoever. In fact, you don’t have to give the insurer any reason at all and you shouldn’t face any penalty. As such, if you find your insurance has renewed and you’re within that 14-day window, you can cancel it quickly and easily – you’ll just need to call your provider and let them know.
If you’ve let your cooling-off period pass and you still want to renew, you’ll still have to call your provider. Sometimes, an insurer will let you cancel your policy if you haven’t made any claims – but they often charge an administration fee to do so. Don’t be fooled into thinking that cancelling your direct debit will just bring the policy to a close – it won’t, it’ll just leave the insurer chasing you for money that you owe.
Is auto-renewing your insurance a good idea?
If you’re forgetful when it comes to insurance cover, then auto-renewals can be a good idea. That said, with renewal letters, emails, and the ability to set reminders in your phone to alert you when your insurance is coming to an end, there are plenty of other safety nets if you’re the type of person that loses track of dates.
While some insurance companies have found themselves with a reputation for using auto-renewals to sneak prices up – auto-renewals aren’t always a bad thing. If you know your renewal is coming up, it’s a great time to compare some deals – so you can compare your quotes quickly and simply when your renewal price comes through the door.
While insurers once rewarded loyalty, it’s increasingly rare now – so shop around, find the best value deal – and, don’t be tempted to allow your auto-renewal to sneak past you unless you’re absolutely confident it’s the best cover for you.