Have you fallen into the trap of allowing your insurance company to auto renew your policies? I did and I ended up paying hundreds of pounds more a year to insure our house and two cars. Like many others I liked the fact that the hassle of checking the market had been removed and I was confident I was being looked after. How wrong can you be!
When I set up our insurance policies originally I chose Direct Line after a thorough search of the market. They offered the best prices for insuring my car, gave me an extra discount for insuring my wife’s car and even a further discount for insuring our house. It was only when I was faced with a change of circumstance and needed to shave the household budget that I realised the error of my ways.
Use market comparison sites to find the best deals – challenge your insurer to match them
As each renewal has come up, I now do a search on a market comparison site such as Compare the Market or GoCompare to see what deals are available. I also check my current insurer’s website, Direct Line in my case, to see what deals they would offer me as a new customer. Armed with this information I call my insurer and ask for a better deal. Typically, I have been offered a 10% discount on the new premium hoping that I’ll accept that. However, when I tell them that I know they are offering new customers a deal which is probably 40% cheaper than they are offering me, they have offered me the new customer price and I have accepted their offer.
Are insurance companies blocking their customers seeing new customer deals?
The above technique worked well when I renewed the insurance policies for our house, my car and my wife’s car earlier this year. I recently tried to use the same technique for my daughter’s car when its insurance was up for renewal. She is also with Direct Line and I was surprised when she was blocked from seeing the new customer price on their website.
Ultimately you can threaten to leave
If you insurer doesn’t want to share the new customer price with you, then you need to get the best price from one of their competitors. When you ring your insurer to cancel the insurance they may try to give you a better price to stay and hopefully match the price from their competitor. However, if they don’t want to match the price you have to threaten to leave and be willing to carry out that threat if they don’t return with the price you were after.
It doesn’t pay to be loyal to an insurance company
I have learnt the hard way that customer loyalty is not being repaid by insurance companies. It will save you hundreds of pounds a year if you switch companies when each policy is up for renewal. My advice is as follows:
– Do not accept auto renewal on your policies.
– Set reminders in the calendar on your phone/computer when renewals are due
– Use a market comparison site to check the best new customer deals on offer
– Use your current insurer’s website to try to find out what new customer deals they offer
– Ask your insurer to match the best new customer deal on offer
– Don’t be loyal to one company, unless they really do offer the best deal for being loyal!