The car insurance trap costing UK drivers £1.4BILLION a year – is your policy affected?
British motorists could save themselves hundreds with a new car insurance policy simply by checking their previous year's premium
CLOSE to five million British motorists are being caught out by a car insurance trap, seeing them pay more than they have to for cover.
Drivers who allow their insurance policy to automatically renew each year could be forking out an additional £1.4billion nationwide.
According to research by GoCompare, millions of motorists still let their car insurance policy renew without updating it or shopping around for a better deal.
Policies that renew automatically will almost always end up being more expensive than a brand new policy.
Research revealed 16 per cent of motorists didn't bother to shop around, a mistake which cost these drivers an estimated £1.4billion combined each year.
Insurance providers are legally allowed to renew your policy automatically, as long as they tell you beforehand.
What is the penalty for driving without insurance?
- The 'continuous insurance enforcement' rule and the Road Traffic Act of 1988 say all cars have to be insured with at least third party cover if they're used on roads and in public places in the UK.
- Since 2011, it’s been against the law to keep a vehicle without insurance unless it has been declared off road via a DVLA SORN.
- It's also an offence to allow someone without insurance to drive a vehicle without insurance.
- Along with a potentialy unlimited fine, you will get six points on your licence for driving a car without insurance.
- The police also have the power to seize, and in some cases, destroy the vehicle that’s being driven uninsured.
A number of insurers will automatically renew policies to ensure customers don't risk driving uninsured.
Under new rules introduced in April last year, insurers are now required to include the previous year's premium on renewal letters.
This allows drivers to see the difference in what they will have to pay if they decide not to look around or negotiate a cheaper deal.
Motorists can, of course, opt in or out of automatic renewal by letting their provider know what they would prefer.
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A spokesperson from the Association of British Insurers told: "Insurers are not legally obliged to renew a motor insurance policy, but drivers are legally obliged to be covered for their legal liability towards third parties.
"Not all insurers automatically renew your policy, but those that do will ensure that all documentation clearly states that this will be the case – and do so to prevent anyone from inadvertently driving uninsured when their policy expires at the end of the year."
Last year, we revealed a simple car insurance trick that could slash your premium by almost half.