The Island’s MP, Andrew Turner, is concerned that over £3million is being needlessly paid out by Islander’s because of the practice by Insurance companies of auto-renewal. Price comparison website MoneySuperMarket have carried out some research which suggests that, nationally, auto-renewal is costing people in the region of £1.3 billion.
Mr Turner said:
“It seems that in many cases people aren’t aware that they are signing up to auto-renewal when they take out their policy. Renewal letters are often confusing, with charges applied for cancelling policies, which leads people to just continue with their existing insurer, despite the fact that they could get a much better price with an alternative insurer if they were to shop around
“I’m concerned that many insurers don’t provide an online cancellation process despite allowing customers to take out the insurance online in the first place and I would urge Island motorists to challenge insurance companies over this practice.”
Dan Plant, Editor in Chief at MoneySuperMarket said:
“As our report lays bare, auto-renewal is far from fair. It reduces proper competition and ultimately costs consumers big money. Our Eight Point Plan shows how insurers can make the auto-renewal process fairer and clearer, helping customers to save money, and we urge the FAC to take action to fix the market.
“Simple changes such as writing renewal notices in plain English, asking consumers to opt-in to auto-renewal when they buy their policy, and providing a click-through cancellation button on renewal emails will help drivers to make sure they are not paying more than they need to.”
MoneySuperMarket state that 62% of consumers say auto-renewals deter them from shopping around for a more affordable policy and that 23% of drivers auto-renewed without even checking one single alternative quote.
The Financial Conduct Authority is set to report in the next few weeks on the use of auto-renewals in the motor insurance market.