Car insurance auto-renewal – Check the complications

October 13th, 2017

We all know that UK car insurance rules are strict and the government would punish anyone driving without valid car insurance. If you are driving uninsured that is without at least a third party insurance then you are at a risk of facing huge penalty and even imprisonment. To save oneself from such trauma, people often choose auto renewal of car insurance. This means that their car insurance policy gets auto renewed unless they inform their motor insurance provider to not renew it or even choose to cancel it.

However, the question here is that what if the customer is clueless about auto renewal of their policy. Is it still valid or not? Today, we glance through this topic and figure out minute details about the entire process and the loop holes associated with it.

One thing is clear that, auto renewal of car insurance is a legal thing but, there is a string attached to it. Yes, it is legal only if your motor insurance provider asks you to choose this provision while buying car insurance policy. If you give permission at that time then your policy will be renewed every year unless you inform your motor insurer to cancel it.

Now, let us consider an ambiguous situation where you are unaware about the auto renewal of car insurance and purchase another policy then you are subjected to two separate car insurance policies. This would prove quite heavy on your pockets and give you tough times if you want to make a claim.

As per the Financial Ombudsman Service (FOS), UK drivers often get the wrong idea about car insurance auto renewal and many end up losing out on their policies. There is also a huge number that forget to update their motor insurance providers about any car revamping process before renewing it. All this causes a lot of chaos and therefore, you must contact your car insurer if you have any confusion about the auto-renewal process.

Is auto renewal of car insurance a profitable bet?

Well, it does save you from penalty and legal complications but, may prove a costly bet when looked as an overall phenomenon. Experts suggest that by not switching car insurance providers, UK drivers are losing £1.3 billion a year through auto renewal of motor insurance. To avoid this, one needs to check with the current insurance provider about the amount of last premium paid. This is vital because this year’s premium would be higher than the last premium and will also include the Insurance Premium Tax. Therefore, it is better to enquire and know how much you are paying and for what.

If you find the auto renewal quote to be too expensive then you always have the option to switch car insurance providers. This always works in your favour as you not only get cheaper insurance premiums but also stand a chance to get discount deals on motor insurance. The new provider would offer discounts to ensure that you get the cheapest motor insurance deal and its worth leveraging it.

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