Motorists Waste £2.8 Billion on Automatic Car Insurance Renewals

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Feb 27, 2012, 12:00 ET

CHESTER, England, February 27, 2012 /PRNewswire/ --

Over seven million drivers stay with their existing insurer at renewal time
2.6 million motorists don't bother to see if they can make savings on cover
Motorists each waste £375 a year on average by not switching, says MoneySupermarket

Motorists are wasting nearly £2.8 billion each year by staying loyal to their existing car insurer, and not shopping around for a better deal at renewal time,^[¹^] says MoneySupermarket.com.

With new '12' plate car registrations released on 1 March, research from the UK's leading comparison site reveals 7.3 million drivers (20 per cent) automatically renew car cover with their existing insurer, rather than shopping around for a better deal. Of these, 10 per cent don't think they could save money, and a further seven per cent, or 2.6 million motorists,^[²^] automatically renew their policy because they can't be bothered to see if they can save money. Just three per cent of drivers renew automatically to comply with legislation on Continuous Insurance Enforcement (CIE).^[³^]

Motorists in London are the most likely to automatically renew their car insurance policies, 29 per cent admit this to be the case.

Pete Harrison, car insurance expert at MoneySupermarket, said: "It doesn't matter if it's pure indifference or idleness - the fact is, motorists who don't shop around at renewal time are really missing out on potential savings; when every penny counts this is an expensive attitude to have. The average saving made by those using MoneySupermarket to compare and switch their car insurance is £375.

"With household budgets under continuous pressure, and fuel prices at record highs, it is worrying so many drivers are willing to throw money down the drain. It's vital motorists don't just accept the renewal price from their current insurer, and instead scour the market to find the best value car insurance deal to suit their needs."

LOYALTY WON'T BE REWARDED

The research also found drivers stay loyal to their insurer for just over two and a half years on average, with the over 55s remaining the most faithful age group (averaging 3.2 years with the same insurer). The younger generations are more likely to shop around for their insurance, only staying with the same insurer for 1.9 years on average. Motorists in Northern Ireland, stick with their insurer for almost three years, whilst those in Yorkshire & Humberside only stay with their insurer for 2.1 years.

Pete Harrison continued: "Insurers rely on driver apathy at renewal time; loyalty may not be rewarded with a cheaper premium and drivers should do their homework to check whether they can find a better deal elsewhere. Even if you don't think your quote can be beaten, it only takes a few minutes to make sure you really do have the best policy to suit your needs."

Shopping around for car cover is now even easier to do when you're on the move; MoneySupermarket Car Insurance is a free App and available to download from iTunes App Store and the Android Market.

iTunes: http://itunes.apple.com/gb/app/moneysupermarket.com-car-insurance/id472968042?ls=1&mt=8

Android Market: https://market.android.com/details?id=com.moneysupermarket.msm

Notes to editors:

^[¹^]Average saving of £375 with MoneySupermarket.com when shopping for car insurance. Based on online independent research by Consumer Intelligence during 1 January 2012 to 31 January 2012.

Research undertaken by Opinium Research based on an online poll of 2,009 nationally representative UK adults, aged 18+ from 14^th - 16^th February 2012. Results have been weighted to nationally representative criteria. http://www.opiniumresearch.com.

According to the ONS there are 49,924,000 adults (18+) in the United Kingdom in 2011. According to the research 74 per cent of UK adults (18+) drive some form of vehicle, therefore there are approximately 36,943,760 (36.9 million adult drivers in the United Kingdom).

20 per cent of respondents automatically renew their car insurance with their existing provider

20 per cent of 36,943,760 drivers = 7,388,752 drivers

7,388,752 x £375 = £2,770,782,000 (£2.8 billion)

NB: The 20 per cent figure has been rounded down by 0.5%

^[²^]Seven per cent of respondents automatically renew their car insurance because they can't be bothered to shop around

Seven per cent of 36,943,760 = 2,586,063.2 or 2.58 million drivers

^[³^] In a bid to protect motorists from uninsured drivers the Road Safety Act 2006 included Continuous Insurance Enforcement (CIE). This came into force during 2011 and means that anyone who is registered as an owner of a vehicle, which isn't registered as SORN (Statutory Off Road Notification), must have a valid car insurance for it or face a penalty.

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SOURCE moneysupermarket.com