Insurance loyalty costs householders millions

Motorists are wasting over £411 million every year by not shopping around for insurance, while only 14% of travellers use comparison sites to secure the best deal, according to research from Confused.com.

The research suggests that one-in-four homeowners have cancelled their policies in an attempt to shave costs off monthly outgoings during the recession, rather than attempting to save money by shopping around. This trend could cost householders dear if they find themselves without cover when they need it.

Darren Black, head of home insurance at Confused.com said:

“Our figures prove loyalty doesn’t pay. A massive amount of money is being wasted by people renewing year after year. It’s a myth that a loyal customer will get a good or better deal. This just isn’t true. It’s never been easier to search the market for insurance; the market is open to everybody.”

If you are struggling to meet insurance payments, you might consider several options before deciding to drop or cut back on an existing plan:

- Assess your individual needs carefully. Your relative level of risks for any insurance plan will be unique to factors such as age, location, and extenuating circumstance.
- Think realistically about your comfort with these risks, and the security that an insurance plan might be able to afford you and your family. There is a fine line between an insurance plan that covers more than you need and one that skimps on the essentials.
- Avoid hasty decisions influenced by financial constraints. You might consider ‘sleeping on it’ in order to settle on an insurance plan that strikes an appropriate balance between personal security and financial cost.
- Make sure that you have the best insurance plan for your specific needs. Before speaking to an independent insurance expert, use an online insurance comparison tool so that you have a clear idea of your available options.
- If you are still having a difficult time affording the insurance plan that works best for you, you might consider increasing your excesses in order to decrease your premiums.