New research from Which? has found that members who shopped around for car insurance paid 18% less last year than those who just accepted their renewal quote.
Which? looked at how much car insurers are increasing premiums, and the quality of their customer communications. People taking part in our research paid an average of £343 for their last car insurance policy. The initial average renewal quote offered by their insurer was £405 – an 18% increase.
Those Which? members who took the time to seek car insurance quotes from elsewhere, around 80%, were rewarded with an average final premium of just £332 which is a staggering 18% less than the initial renewal quote and 3% less than they paid for the previous year.
You don’t always have to switch
In many cases, drivers didn’t need to switch insurers. Simply reporting the lower quotes they’d found elsewhere was enough to persuade their existing insurer to match competitors’ quotes.
Even those who didn’t seek alternative quotes ended up paying £15 less on average than their initial renewal quote, just by negotiating on the phone. This suggests that insurance companies build in some room for discounts when setting the renewal premium. But this still leaves 70% of those who didn’t get other quotes paying the full renewal amount.
More than 500 Which? members took part in our largest ever investigation into car insurance prices and our results show it’s definitely worth getting quotes from other insurers when your renewal letter arrives.
No reward for loyalty
Which? members tend to be pretty loyal and many of those we surveyed said they’d prefer to find a good insurer and stay with it. But unless you actively negotiate with your existing insurer, quoting cheaper rates elsewhere, it’s likely to raise your premium.
One member expressed his frustration at the perception that customer loyalty isn’t acknowledged, or welcomed, by insurers: ‘What is wrong with encouraging loyalty and saving all the extra advertising and switching costs?’
Paul Davies, Which? insurance analyst, said: ‘The overwhelming feedback we received from panel members was that they were tired of playing the renewal ‘game’ and wanted to know why insurers couldn’t just reward customers who make a commitment to stay with them.
‘Drivers don’t always want to switch company each year, but our members recognised that this is almost inevitable to avoid spiralling prices.’