Motorists are being penalised and punished for their loyalty when it comes to their car insurance. New research from Confused.com revealed that motorists renewing their car insurance are paying more when compared to those who shop around. More than half (55 per cent) of motorists who renewed their car insurance in the last quarter (January-March 2019) saw their premium go up by £46 when they opened their renewal notice, on average. A further 58 per cent of motorists also stayed with the same insurer when they renewed their premium, suggesting these motorists did not look around for a better deal.
On the other hand prices for new drivers gave actually dropped according to Confused.com’s car insurance price index.
The data reveals the average price of car insurance dropped -£12 (-1 per cent) over the past quarter (Q1 2019) and average prices are sitting at £762.
This follows investigations by the Financial Conduct Authority (FCA) and Competition and Markets Authority (CMA) which exposed ‘loyalty penalties’ being placed on motorist’s premiums if they don’t shop around for a better deal and just stay put.
It has been reported that the penalties are totalling £4.1 billion each year.
On average motorists are staying with their car insurance providers for three years, meaning their could be overpaying in two out of three years.
Drivers who switched car insurance providers the last time at their last point of renewal were able to save £81, on average, the research found.
Younger motorists (18-24) saw the biggest savings when shopping around, according to the research, saving £169 by switching at their last point of renewal, on average.
Louise O’Shea, CEO at Confused.com comments: “Car insurance is just one of many ‘invisi-bills’ people resent forking out for. But it’s clear many drivers become overwhelmed when their renewal date comes around.
“As a result they aren’t taking the opportunity to shop around and find a better deal.
“Recent investigations by CMA and FCA have found consumers are being overcharged by a collective £4.1bn just by renewing with their current provider.
“This concerns me because I know there are savings to be made, especially with car insurance.
“There is always another insurer out there willing to offer you a better deal, even if your year-on-year renewal price is cheaper.
“At Confused.com, we are so certain of this that we are offering to beat customers’ renewal quotes, or give them the difference, plus £20.
“People shouldn’t be paying more than they have to. Drivers should check their renewal letter, find out how much they paid last year, then shop around to get a cheaper price.”
Confused.com is giving motorists the chance to save more by guaranteeing to beat their car insurance renewal price or give them the difference, plus £20.
Published at Mon, 15 Apr 2019 10:07:00 +0000