Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Loyalty to the same insurance company could end up costing you

(Getty Images)
(Getty Images)

UNLESS you have to make a claim on your home insurance, it’s easy to stick with the same insurance company.

Particularly since policies are renewed automatically.

Unfortunately, insurance companies take advantage of the loyalty most of us show them by increasing the cost of our premiums, knowing many of us won’t look elsewhere.

A quarter of us automatically renew our home insurance policy instead of shopping around, yet the typical annual increase of £9 means we are collectively wasting millions.

Analysis by MoneySuperMarket reveals that more than half (54%) of those with buildings and/or contents cover chose their current provider because they offered the cheapest deal when they took out the policy.

But for those who automatically renewed, premiums rose by £9 on average.

If those customers shopped around at renewal, they could see savings of £59 — £243 million collectively — claims the comparison site.

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “Insurance companies trick loyal customers into sticking with them — but with higher premiums — through confusing renewal letters and notices, whereas new customers are offered great rates to get them through the door.

“If this happens year on year, loyal customers can end up paying hundreds of pounds more than they need to.

“When it comes to insurance, the message is clear — loyalty doesn’t pay.”

When renewing their home insurance, only 15% of policyholders look around for other quotes before negotiating with their existing provider to get a lower price.

So why are we so unworried about the cost of our insurance?

MoneySuperMarket found that 37% of those surveyed who automatically renewed were happy.

A fifth couldn’t be bothered to shop around, and a similar proportion (17%) said loyalty stopped them from moving.

Others said they like their current providers’ brands, or that they thought they provided good customer service.

Kevin Pratt continued: “Home insurance premiums fell to a six-year low in April, and prices are now at their lowest since 2010, standing at £109 on average for combined buildings and contents cover.

“Customers who auto-renew are not benefiting from these competitive prices, though — they are reserved for those switching providers.

“As a nation, we spend over £37 million more than we need to because so many home insurance providers renew their customers’ policies automatically — that’s money we can’t afford to waste.

“There are savings of up to £59 per household to be made by shopping around and switching providers, rather than letting the insurers get away with it every year.”

If you’ve looked around at alternative house insurance policies, you might want to do the same for any other insurance you hold.

A study of car insurance found nearly a quarter of drivers automatically renewed their car insurance when their existing policy ran out, meaning UK motorists are being stung collectively for £1.3 billion each year simply for being loyal.

The Financial Conduct Authority (FCA) has proposed that insurance companies should include the cost of last year’s insurance on renewal   documents, to try to encourage customers to shop around.


READ MORE

Car insurance: There’s no excuse for driving without the required cover

Waiting to buy travel insurance can be costly