Why auto renewal of home insurance is a bad idea?

December 10th, 2019

First of all, you need a pat on the back if you already have a home insurance policy as there are a considerable percentage of Britons who do not worry about insuring their home against adversities. Next thing that needs some serious thought is whether your home insurance gets auto renewed every year or not. If yes then you may be at a big loss as switching home insurance provider would have saved you a good deal of money then sticking to your age-old, favourite insurer.

According to reports by the Financial Conduct Authority, UK customers can actually save somewhere between £64-103 million per year if they choose to switch home insurance providers instead of auto renewing their policy. Owners should compare the home insurance market at the time of renewal to get the best discount deals on home insurance. Either your current home insurer would offer discounts to keep the policy on or you can get it from providers that offer the cheap home insurance deals.

Reasons that suggest auto renewal of home insurance is bad:
High auto renewal fee: Well, most of us choose auto renewal policies so that even if we forget the date of renewal, our homes are still insured. However, you might get surprised to discover the fact that you need to pay quite a high price for it. As per experts, a big number of UK home insurance providers charge an admin fee for auto renewing the policy. Sometimes, this fee can be as high as £50 and thus, not the best bet for your savings. At times, it is more than home insurance cancellation fee and thus, proves to be a pricey affair.

Loyalty charges: The UK home insurance arena is unforgiving for its loyal customers. In search of gaining more business, the providers offer discounts on home insurance to tap the new customers but, the ones that stick with them are charged higher premiums from the second year of the policy. So, if you are not prepared to switch home insurance providers then you should be ready to pay higher insurance premiums.

Lack of information: The worst part about home insurance renewal is that while most insurers inform the customers about the renewal date of the policy, they do not mention their last paid premium. This is misleading as customers do not know that this year they are charged higher than the previous year and keep paying higher charges with every passing year. To save customers from such duping, the FCA announced a rule in April 2017 that states that all insurance providers need to mention the last paid premium amount while reminding the renewal date. This rule was declared for home, pet and car insurance.

What is the way out?
The best way to get the cheapest home insurance premiums is to switch the insurance provider. You need to compare the home insurance market in UK and find the provider that offers cheapest insurance premiums. In addition, choose the one that suits your requirements by checking home insurance reviews. If you find comparison of home insurance a tedious task then rely on FreePriceCompare, a price comparison expert for various utility supplies.
To know how much you can save on switching home insurance providers, feel free to reach out to us at https://freepricecompare.com/insurance/home-insurance/.

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