UK DRIVERS could save on their insurance as a crackdown on auto-renewing policies is launched.
And auto insurers who fail to properly explain that their policies will roll over at a higher price could face hefty fines.
The Competition and Markets Authority (CMA) recently warned insurers who fail to gain a driver’s approval to renew a policy could be breaching British consumer laws.
And under a new Government proposal, the CMA would be able to issue hefty fines to insurers if they believe a driver has not given their clear consent to roll over their policy.
Other regulators, including Ofcom and the Financial Conduct Authority, would also be able to crack down on misleading policies as a part of the changes.
According to Fairer Finance, 26 out of the 51 motor insurers it monitors don’t fully explain auto-renewal to their customers.
Most common car insurance white lies Brits use to try lower their premium
These are the common lies which could make your insurance policy invalid and land you with a criminal conviction:
- How you use your car
- Lying about your job
- Not declaring previous penalty points or driving convictions
- Listing the main user of the car as an additional driver
- Hiding past claims or damage to your car
More than a third of drivers let their annual car insurance policy auto-renew instead of looking for a better deal.
Motorists almost always end up paying more if they roll over their policy automatically, yet millions still don’t bother shopping around.
A recent study by MoneySuperMarket revealed auto-renewing policies cost British drivers around £565million every year.
And on average, individual policies increased by £40 when rolling over last year.
James Daley, managing director of Fairer Finance, said: “Too many insurers fail to give customers enough information about what will happen when their policy comes to an end.
“If these new rules work as hoped, we would expect to see this type of practice stop.”
A spokesman for the Association of British Insurers, said: “We are awaiting the outcome of the Financial Conduct Authority’s review into pricing in the general insurance market, which is expected in the next few months.
“We will comment on the Government’s proposals once we have seen further details.”
Earlier this month, we revealed that Brits had spent more than £200 each due to changes to car insurance tax.