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I recently received an Auto-renewal on my car insurance from my insurer. And it boggled the mind as it more than doubled the premium. It went from £960 a year to £1950.

I caught up on the topic between then and today and there are opinions, that when this happens it means the company doesn't want your custom.

OK, fine. But why?

Literally nothing changed during that last year. No ticket (was careful), no accident, nothing (unless my unpaid Dart charge mattered - which I forgot but paid without quibbling; but that's not an infraction of any kind on The Highway Code and is less than 14 days old) . Same address, same job, same car, same add-ons. Only no-claim bonus is now 2 yrs instead of 1 yr. When I called and requested not renewing they offered to recalculate the auto-renewal quote. It went down £175 to £1775.

When I searched for better quotes I get cheaper ones than the one last year. So something's working, at least.

Setting aside the habitual rip-off of existing customer in UK nowadays (heard about £200-£400 haggling gain in case of auto-renewal), this is something I can't explain. Why might this happen? It would be grand if I could tweak my details to get better prices (of course legally).

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    Just give them a call and ask them... – gaefan Aug 14 at 17:56
  • Perhaps they are using typical phone company tricks, e.g. slap in unwanted coverage into your insurance policies and hope nobody noticed it. In addition, Brexit also means less competitive market to rip off British ;-) – mootmoot Aug 15 at 8:34
  • @gaefan even better, get some quotes elsewhere (price comparison sites can be handy for this) and ask whether the current insurer can match them - in my experience, this will frequently get the renewal price down significantly. – Tom Revell Aug 15 at 9:09
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    Nothing changed TO YOU. For them they might revise their statistic and came up that such and such drivers with such and such cars pose a higher risk of crashing OTHERS cars. – SZCZERZO KŁY Aug 15 at 13:11
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    I call this the "lazy tax". Almost every auto insurer I've dealt with will raise premiums hoping that their customers are too lazy to shop for insurance again. – Helpful Friend Aug 15 at 17:35
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Maybe their underwriters have decided they are over-exposed in your area, or demographic (by age, occupation, whatever). Maybe they are trying to scale back their operation overall. Maybe you being a year older puts you in a different bucket, as far as their risk analysis goes. And so on and so on.

Mass-market insurance is so risk-model-driven these days, and those models are so complex, that it's entirely possible that no one person can give you a human-understandable explanation of 'why'. They are acting in what they believe to be their best interests - you should do the same.

MoneySavingExpert has some excellent pages on car insurance, including the details-tweaking that might help. In particular, this is the page on what to state your occupation as to minimise premiums - for example 'Software Engineer' gets about 1.5% off compared to 'Computer Programmer'.

  • I seen that website. And I saved over 5% by changing the day of the week of coverage start from Sunday to Monday.. I was able to find insurance £150 cheaper comapred to last year, but what they offered, both as auto-renewal and when I rang them, was laughable £1k and £700 more, respectively. So no, that's not it. – AcePL Aug 16 at 8:14
  • And that insurer popped up in one of the quote compares I did. And curiously - their quote then and there was £1k with some add-ons - while CS agent offered me £1.6k when I called them to complain. So, while I agree on the points you raise as possible increases, I still think it's something else... I seriously doubt it that after clocking 9k miles over that year, still being married and having a child, using car socially only I'm a risk increase. I wonder if it's Brexit... I have EU driving license... – AcePL Aug 16 at 8:33
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Caution: somewhat opinionated answer (although I don't have/need car insurance, so do not have a particular "axe to grind").

Why might this happen?

You weren't supposed to notice. You were supposed to just let it renew quietly.

The insurance industry (somewhat like Utility supply industries) is particularly cut-throat: margins are tight, so companies need to attract as much new business as they can. They want to compensate for low profit-per-customer by having as many customers as possible.

So, particularly in the age of the comparison website, they will offer extremely attractive deals to new customers switching from other companies. A cynic might believe they even offer loss-leaders. Once a new customer has joined them, despite the prevalence of comparison sites, there is an increased chance that they will stay with that company, at least for a couple of years. This might be due to a feeling of loyalty on the part of the customer, but – I suspect – many people will not think about insurance until next year's reminder arrives, at which point sufficient numbers will not be bothered wading through the comparison sites to try and find a better offer and will simply allow the renewal to go ahead1. The price for these years will tend to revert from the "attract new customers price" to one that more accurately reflects the risks involved (and, probably, beyond that figure, to help recover revenue-reductions due to the initially-low prices).

When either someone does notice the price-hikes on renewal (or they rise by too much that "can't be bothered looking around" ceases to be an option) then customers will return to the price-comparison websites, and the whole process starts again. (As the OP noted, the current insurer may offer a modest discount on their original renewal quote, but the fact that the customer is questioning the figure means they've probably lost them already).


In case anyone thinks I am having an undue go at insurance companies, I'm not. In a lot of ways, this is how they have to do business in the current climate.

In the "good old days", before the internet, hunting around for "the best deal" was much more time consuming, so a lot of people would tend to stick with the same insurer for longer. Some would go through an insurance broker to do the searching for them, but they – quite reasonably – would need to be paid for their work (either directly or indirectly). I strongly suspect that – while "new customer deals" probably did happen – they were not as dramatic as they are now, and the price settled to a more uniform level representing the actual risks involved.

Since then there have been two major factors that I think have affected the industry:

  • Price Comparison Sites
    In some ways, a double-edged sword for the consumer. Yes, they allow customers to search for "the best deal" (although not always: some insurers don't work with any/some comparison sites, and some sites may "favour" those companies they have deals with).

    On the flip-side, it means insurers that do participate are under constant pressure to offer as cheap a deal as they can, leading to the current situation of artificially-low prices for new customers that have to be offset by larger jumps for renewing ones.

  • No Win, No Fee Lawyers
    Over the last couple of decades there has been a dramatic increase in the number of companies offering no win, no fee services. While this will probably have enabled a lot of people to get justice that previously they would not have had access to, it has also led (IMHO) to a vast increase in essentially frivolous claims. These are often at levels where – taken case by case – it is cheaper for insurance companies to settle than to fight. Collectively, though, they must impose a great burden on insurance companies, which – necessarily – has to be reflected in the premiums.


1 Interestingly, an article on This is Money, carrying similar stories to the OP's, notes that when you try to renew can affect the prices on offer:

Timing affects the quotes you get

Insurers will offer cheaper quotes to customers they view as less of a risk. So if you buy your car insurance before it needs to be renewed you will be judged as a more organised, and probably safer, driver.

An investigation by MoneySavingExpert suggested 21 days before renewal is the cheapest time to get your car insurance. You could expect to pay £587, on average.

If you buy it on the day it was due for renewal, you can expect to pay up to an extra £567, taking the average annual premium to £1,156 a year.

Part of this will be simply that the later someone leaves looking to renew, the more they are in a "take it or leave it" situation – they need insurance by the end of the day, so will have to pay whatever is demanded. Another reason could be that someone looking ahead of renewal is more likely to be on top of the situation, and therefore less likely to passively take the auto-renewal figure when it arrives in a couple of weeks.

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    The "modest discount if you ask" doesn't make sense to me. I would have expected them to go down to "something a bit worse than the market rate" (because it's less hassle for you to just stay with them). – Martin Bonner Aug 15 at 15:06
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    @MartinBonner Essentially, you're at the point where they no longer need you "at any cost". They've given you a year at super-introductory rate; possibly a year or two around the recoup-our-money rate. They now more-or-less need you to be at the renewal rate (or a modest discount to it) to make money. If you won't accept that, they'd rather lose you (and let some other company offer you a deep discount). – TripeHound Aug 15 at 15:15
  • @MartinBonner In other words, the "modest discount" (e.g. that the OP was offered) probably is the true market rate. It covers their (expected) costs, and gets them some profit. – TripeHound Aug 15 at 15:17
  • From some testing I did I saved 5% just by changing the day of new cover start from Sunday to Monday. Literally changed it from 1.09 to 2.09. And I did read that article. I started hunting for new insurance actually in mid July. And I did nice quote of 756. Trouble is - that was 1.5 month before renewal. You can do just 28 days before. And I can't say software engineer b/c I'm not one. I'm Business Consultant/Analyst at this time. Would not be suprised if they void my insurance because i lied on the application about my job if bad day happens... – AcePL Aug 16 at 7:57
  • To comment on another part of the answer: no, that's not it. Or to be more precise: no, not because just of it. Let me put some things in perspective: In Poland (where I come from) my car - the same car, not just "similar" , THAT car - is worth twice as much as in UK. Literally. I checked. My insurance there, including RHD increase is £650. Without NCD, but with all add-ons... And people are haggling not only over insurance, but when payout comes, there are firms that can help and negotiate it. And lawsuit is also not uncommon. So reason is elsewhere. And I call it insurance scam. – AcePL Aug 16 at 8:04
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The insurers hope you won't notice and it auto-renews. Mine recently sent an email telling me my renewal would go through automatically at the end of the month unless I called them, in tiny text I could see the renewal amount it was £200 more than last year and I've not had any claims.

I immediately went online and found an insurance quote with the same insurer £250 cheaper! I rang them and they said they were happy to offer me that price, so I think they hope no one will check or haggle!

  • But you would assume that when you see £1950 as your auto-renewal, compared to 960 premium you paid them year before? You would not be like: "heh, they try to trim the sheep, I go look elsewhere". I was like "WTF?!?!?". Out loud and without restraint. Scared my wife. As I said - I know of this practice. but does the above look like it to you? £250 compared to £1k looks like what? – AcePL Aug 16 at 8:09
  • My partner has only had his licence for 1 year and he got his renewal through for over £600 more after a clean year of driving and no claims. He also went elsewhere and found it a lot cheaper. There seems to be no regulation over insurers doing this! – Clare Aug 16 at 10:06
  • Thank you. No regulation is fine - I'm not other people so I will shop around for cheaper offers - I was curious if there are any rules to that existing customer rip-off. And answer is: apparently none. – AcePL Aug 16 at 11:04

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