Motorists in the UK who automatically renew their car insurance are losing out to the tune of £1.4bn a year, according to a new survey.
The insurance comparison site GoCompare carried out an online poll of 2,006 people in August to see if changes to insurance renewal letters imposed by the Financial Conduct Authority had had an effect on consumer behaviour.
However, it said 16 per cent of motorists were still automatically renewing their policies without checking to see if they could get a better deal, costing them £1.4bn each year.
The survey followed one in February before the changes were implemented so that comparisons could be drawn. Insurers now have to include the previous year’s premium and encourage policy-holders to shop around.
The latest results show that 46 per cent of respondents recall seeing their previous insurance premium on their renewal letter – an eight per cent increase on the last survey’s result of 38 per cent.
There was also a jump of nine percentage points – from 27 per cent to 36 per cent – in people saying their previous insurance premium was shown clearly on their renewal letter.
More people also said they saw wording encouraging them to check that their cover levels were still appropriate – up from 27 per cent to 30 per cent.
Finally, 17 per cent remembered seeing wording encouraging them to shop around for a better deal – five percentage points up from February’s 12 per cent figure.
GoCompare’s data also shows that the number of motorists automatically renewing their insurance has dropped from 17 per cent to 16 per cent.
Meanwhile, the number of drivers who say they switched provider at their last renewal has increased from 30 per cent to 32 per cent.
The changes were introduced in April because some insurers weren’t displaying key information prominently enough when sending renewal letters.
Georgie Frost, consumer advocate at GoCompare, said: “It is certainly good news that more motorists are seeing this important information on their renewal letters, and our research gives the first indication that the FCA’s initiative could be starting to make a difference.
“However, it is early days and we have to keep these results in perspective. Most drivers didn’t recall seeing their current premium on their last renewal letter, and just 17 per cent of people say they saw the message encouraging them to shop around.
“The FCA warned insurers to up their game in April. Therefore, we need more time to see if this initiative really can make a difference. But realistically, we need a lot more than 17 per cent of motorists noticing a reminder about shopping around if we are to break the cycle of five million UK drivers auto-renewing their policy without checking if they could get a better deal elsewhere.”