Research shows you may be throwing money away by staying with an insurer who isn’t giving you their best deal.
No one wants to buy the same product for a markup at the supermarket, especially when the cheaper alternative may be just as good, if not better. Yet, the latest research from Compare the Market (disclosure: I’m Economic Director of Compare the Market) shows that almost one in four car insurance policyholders (22.5 per cent) could be throwing away money by staying with the same insurer they’ve always had.
Car insurance premiums to increase
With car insurers flagging that premiums are likely to increase at renewal time, there are potential savings people may miss out on by sticking with the same insurer without comparing their options.
Gone are the days where it pays to be faithful to companies. In fact, we’re seeing more incentives than ever before offered to new customers. We’ve seen this across the banking sector, where banks are trying to entice new customers to refinance, while even those who ask for a negotiated rate are getting better rates than those mortgagees who sit idle.
It’s the same thing in the car insurance sector. The harder you look for a deal, the more likely you are to find it.
With so many choices and levels of car insurance available, it’s hard to understand why so many people are potentially throwing money away on higher premiums with their current insurer.
By shopping around, people may be able to find a greater level of cover, for the same, if not cheaper, price point. There may be greater perks or discounts on offer, which could boost the hip pocket, especially with the current cost of living crisis breathing down our necks.
Source: Compare the Market
Boomers least likely to change
The survey also found that Baby Boomers were the most likely to stick with what they know, with almost 30 per cent of the cohort stating they never stray from their car insurer. And as much as Baby Boomers may call Millennials the ‘switch and ditch’ workforce, this mentality may be helping Millennials save on their car insurance, as only 14.9 per cent of the cohort stated they stay loyal to their insurer.
The research found that Gen Z was partial to choosing their car insurance providers based on family recommendations (30.9 per cent). While this may be a good place to start, it’s recommended that people review their own needs and what they may be able to afford. No policy is a one-size-fits-all, so something that may work for an established family might not work for someone starting university.
Check the underwriter
But there are things people need to consider when looking at car insurance, such as the underwriters of each company.
There may be a misconception that all brands underwrite, or take on the financial responsibility to pay out policies if people claim on their policies. Yet in most cases, especially for most challenger brands, they are underwritten by bigger, more well-established companies, which may offer similar levels of cover for a lower price.
And while people may feel a bit more comfortable paying more for cover from a well-known brand, there may be challenger brands in the space who use the same underwriter. And at the end of the day, it will be the underwriter who will look to pay out if there’s ever a claim made against a policy.
In the current economic climate where every cent is under review, comparing the products on the market may help you find car insurance policies that are better suited to your needs at a possibly cheaper price, without having to pay for brand faithfulness.
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