Five questions on: Insurance renewals

 

Gosh, it's not that time again, is it?

Actually, a lot of people do face insurance renewals in the early part of the year. That's largely because so many people buy their house or car in late winter or early spring. But that's not why renewals are in the news.

Ah, is it because insurance premiums are soaring?

Not that either. In fact car insurance costs have fallen in recent times. However, looking ahead, home insurance premiums could rise after the cost of the floods is factored into rates. Significantly, the insurance industry this week refused to rule out price hikes in the next 12 months because of flood claims costs, which almost certainly means they are in store for us all.

I knew it was bad news. So at renewal I should expect to pay more?

That's entirely possible. But the news this week actually centres on a campaign to force insurers to tell you last year's premium costs when they give you a new quote.

That's a good idea, isn't it?

Certainly is. In fact research by Which? found nearly 9 out of 10 people said they would find it useful to have the amount they paid last year on a renewal letter.

So are insurers going to fall into line?

We'll see. The consumer group has only just launched its "don't pay a premium campaign", which calls for insurers to explain any differences between last year's and this year's renewal quote. To date, insurers don't seem keen on the idea. Huw Evans of the Association of British Insurers said: "Renewal should never be just about price." He's right, as it's important to get adequate cover, not just the cheapest. But knowing how much you paid last year would clearly help you work out whether your insurer's new quote is fair. As such, I can see no reason for insurers not agreeing to this, unless they want to try and hide the fact that they're hiking premiums.

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