If you’ve received a renewal for your car or home insurance in the last few months your insurer will have let you know how much your premiums will be for the next year.
However, few financial companies will also tell you what you paid for your cover in the previous year.
Now, that could be set to change. One of the UK’s leading insurers is set to begin sending out renewal notices outlining both the cost of cover for the next 12 months and what you have been already been paying for your car or home insurance. Keep reading to find out more.
Insurer will tell you what you paid this year as well as your renewal premium
When your car or home insurance renewal arrives you will often head online to a price comparison site to compare the cost of cover. However, what is more difficult to do is compare the cost of next year’s insurance to what you are paying already. As the Daily Telegraph reports, ‘without digging out last year’s quote, you don’t know whether this new quote represents an increase of 5 per cent or 50 per cent.’
Now, one of the country’s leading insurers wants to make insurance renewal more transparent by including your current premium on your renewal notice. From this month, Axa will tell policyholders how much they have spent on their previous year’s car insurance when it sends out its renewal quotes.
The insurer has also said that it will display the previous year’s premium on renewal letters for home insurance from June and all direct business customers from July. The changes also apply to customers of Swiftcover, a subsidiary of Axa.
The insurer said the move would help customers ‘easily compare renewal prices when making their decisions about cover for the coming year. This action is part of a drive towards greater transparency, designed to create deeper levels of trust and loyalty.’
Yves Masson at Axa said: “We believe that being more transparent with the information we provide will help customers make the right purchasing decisions. It’s a key factor in building trust, which has been all too sadly lacking in our industry in the past.”
Axa move could change the industry as a whole
While Axa customers will welcome the move and be more easily able to analyse the cost of their insurance, the move could be significant if other insurers were to follow suit.
Matt Oliver, car insurance spokesman from a leading price comparison website, said that insurers putting last year’s premium on renewal documents was ‘good news for drivers’ and ‘a positive step towards making the insurance industry more transparent and competitive’.
He said: “We’ve been saying for years that loyalty doesn’t pay when it comes to insurance, with the best deals typically offered to new customers, not those who renew. If insurers choose to display last year’s premium at renewal it doesn’t change the fact that, regardless of what premium you’re offered, getting online and comparing prices and policy details from other insurers should be your first thought when you see your renewal letter.”
Gwilym Pugh from Im-insured.co.uk said: “Giving policyholders information not only about their new premium but also what they have been paying will help consumers make better and more informed decisions about their cover.”