‘We promise to beat your renewal quote!’ – but let’s face it – it’s hardly headline news is it? Nowadays it’s more unusual to find an insurer who doesn’t promise to beat your car, home or travel insurance renewal quote than one who does.
But is the deal on offer really such a good one? In theory, it seems simple. Your current insurer offers you a renewal quote (usually higher than last year’s), and another insurer offers to better it. You’d be a fool not to switch right? In fact, there are often several conditions and restrictions attached.
The First Direct website, for instance, says they will guarantee to beat your car insurance renewal quote by at least 10%. Underneath in smaller type it mentions the fact that minimum annual premiums apply: 200 for comprehensive cover and 120 for non-comprehensive cover. There’s no deliberate subterfuge here of course; the conditions are made clear at the outset. But, as with all financial products, it’s important to read the small print or in this case, the smaller print – before you sign up.
Other leading insurers offering to beat your renewal quote on a like for like basis include Churchill and Privilege. Another popular saving is money off if you buy online. Churchill offers 15% off if you buy home insurance online, while Privilege tempts its car insurance customers with up to 25% off the top two levels of Privilege breakdown cover, if they purchase their cover online. Other offers out there for bargain hunters include the Post Office’s 50 cash back for new car insurance customers, and 35% off for Halifax Home Insurance customers who take out both buildings and contents cover.
But while insurers are keen to tempt new customers with special introductory offers and discounts, more often than not they’ll up their premiums the following year. And the fact is, many of us just can’t be bothered to switch. Perhaps surprisingly, given the incentives on offer to jump ship, MoneySupermarket.com states that up to 75% of us stay with our existing insurer at renewal time.
But now it seems that a small number of insurers are starting to move away from the ‘ditch and switch’ school of advertising, in favour of strategies aimed at retaining customers. More Th>n, for example, is currently giving its customers two months’ free cover when they renew, providing they have not made a claim. Buildings insurance customers can also benefit from free contents cover as long as they do not make a claim. Direct Line has also announced that vandalism claims will no longer affect a policyholder’s No Claims Discount.
All of which means, whether you’re a new or an existing customer, there have never been so many benefits and savings to enjoy. And if comparing insurers seems daunting it needn’t be: there are a host of excellent price comparison sites to help you find the price and the deal you’re after.
Sadly the art of negotiation is lost on most insurers as they either outsource their admin side to companies who don’t have the authority to adjust any premiums or their profit margins are so slim that they can’t even afford to drop your rates by a couple of quid. This is most likely true for the “budget insurers” or internet-only generation of coverage. If you are with an old-school insurer such as Liverpool Victoria or Norwich Union, don’t be afraid at renewal time to phone up your insurer and say “look, I’ve just got a quote that’s 100 less than the renewal you gave me for the exact same cover, what can you do because I’d really like to stay with you”. The answer might surprise you.