When it comes to home insurance, it’s all too easy to let your coverage renew automatically year after year. In fact, according to new research, the majority of Brits let their home insurance renew automatically. This could be a costly mistake. Here’s why.
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How many Brits let their home insurance renew automatically?
According to a new study by comparison site GoCompare, more than two thirds (67%) of UK homeowners admit to letting their home insurance renew automatically. And 29% of people actually let their insurance policy renew without even checking for other quotes.
When asked why, 17% said they don’t want the hassle of finding other renewal prices, even if it means saving money.
That said, loyalty to their current provider emerged as the top reason why people let their existing policy renew (29%). Of those who automatically renew, 22% said their current insurer had taken good care of them. And 18% thought renewing was good value for money because their previous year’s quote was the cheapest at the time.
Why shouldn’t you let your home insurance renew automatically?
Allowing your home insurance to renew automatically is not a good idea for one main reason: you may be able to find the same level of cover or better for much less by shopping around.
In fact, when it comes to insurance, loyalty rarely pays. You are often better off looking for a new policy once your current one expires. Insurers typically offer the best deals to new customers, and the value you receive for your policy deteriorates the longer you stay with your provider.
By shopping around, you can compare and negotiate quotes to get the best possible cover for your needs.
Another reason why allowing your policy to renew automatically may not be ideal is that it may no longer meet your needs. If you simply let your existing policy roll over, you could end up with a policy that has not evolved with your home and may not provide you with the cover you require.
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What do you need to know about switching home insurance?
Switching home insurance providers isn’t as difficult as you might believe.
Here is a simple five-step procedure for making a switch.
1. Define the cover you need
Your insurer will notify you when your policy is nearing renewal (at least 21 days before). This is a good time to start thinking about the insurance you’ll need for the coming year.
Is there anything in your home or its contents that has changed your insurance requirements in the last year? Sit down and reassess your needs to determine the precise type of cover you require.
2. Compare quotes
Once you’ve determined the cover you require, use insurance comparison websites like MoneySuperMarket, GoCompare and Confused.com to compare quotes from different providers.
Keep in mind that not all home insurance providers are included on comparison sites. Try to identify those that are not and consider contacting them directly to get quotes.
3. Do your homework
Once you’ve identified a suitable policy, do your homework on the provider before you accept their quote. For example, go online and check out reviews from customers who’ve used the provider. Don’t forget to read the fine print of your policy carefully before you sign it and ask questions where necessary to avoid any unpleasant surprises later on.
4. Make the switch
If you are satisfied and happy with the new provider, make the switch. It’s important to make sure that your policy starts the day your old one ends. This will ensure that you are covered throughout the switch.
5. Notify your current home insurance provider
Let your current provider know about your intention to switch. A lot of insurers actually have auto-renewal clauses in their policies. If yours does, then your policy will auto-renew unless you explicitly tell your insurer otherwise, so don’t forget to cancel.
Final word
There are times when it may be best to stick with your current provider. This is usually down to personal preference. For example, you may be particularly impressed with the customer service your provider offers.
If this is the case, once you’ve found a lower quote from another provider, you can always take it to your current provider to see if they’ll match it. There is no guarantee that they will agree, but it doesn’t hurt to try.
