We've all been there – the car insurance policy is about to expire, there’s no time to search for and do a deal with a new insurer, so it’s tempting to remain with the existing provider.
If you’re happy with it and it’s happy with you, why not? Commonsense says such relationships should continue on a seamless, mutually advantageous basis, but only if renewal notice prices are fair and appropriate.
In my experience, they aren’t. Some firms massively hike them at renewal time. More Than once tried – and failed – to impose a 50 per cent year-on-year increase on me. That’s why motorists need to arm themselves with a weapon called BIPI when renewing their policies with existing providers. BIPI’s the AA-administered British Insurance Premium Index which displays the official rises/falls in the price of policies from one year to the next.
Last month’s BIPI bulletin states: “Over 12 months, premiums have fallen by 5.8 per cent.” With this in mind (and assuming your car and personal circumstances haven’t changed), a policy you were charged £1,000 for a year or so ago should cost you around £942 when renewed 12 months later.
So how come the prices demanded in the renewal notices Tesco and LV lately sent me have contained inflation-shattering increases? Tesco apologised for the unfathomable 17 per cent rise it tried to dump on me. But it refused to justify the proposed increase.
“You’re a loyal customer and we don’t want you to leave us,” it said. “But how we price a policy is not something we’re able to share with our customers.” Result? Tesco lost its “valuable” client.
• Cheaper car insurance for young drivers
LV was smarter. Its latest renewal notice arrived with a 10 per cent year-on-year increase. But after I urged the company to think again, it held its hands up and immediately responded by offering a 2015-16 policy priced within two per cent of the 2014-2015 policy it sold me.
Comparing like with like, I’m now paying less for my car insurance than I paid years ago – simply by fighting the quoted renewal prices I regularly receive. I couldn’t have achieved all this without BIPI by my side. Use it and quote it every time you renew a policy and you’ll save hundreds, if not thousands over the years.
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