Car insurance firms often increase customers' policies each year in a feature known as “price walking”. Companies offer road users the lowest possi
Car insurance firms often increase customers’ policies each year in a feature known as “price walking”. Companies offer road users the lowest possible price to entice them to join the company before slowly increasing costs over time.
But this can see drivers paying an average of more than £70 each year for cover with some drivers paying into the thousands more for a basic agreement.
Freddy Macnamara, founder of Cuvva has revealed drivers should “urge” firms to be honest and open about their pricing structures.
He said drivers should “feel comfortable” asking firms why prices have increased so they can understand whether the rise is justified.
His comments come after data revealed that more than a quarter of road users said they stuck with the same car insurance provider this year despite many facing increases.
READ MORE: Car insurance: This driver paid £1,300 more for cover this year
Mr Macnamara said: “Despite insurers quoting on average £72 more each year for the same annual policy, and some drivers seeing increases by as much as £1,300, more than a quarter (28%) of drivers surveyed admitted they stuck with the same provider in 2020.
“It’s important to challenge providers and urge them to be transparent with you.
“While drivers do have a responsibility to read terms and conditions, you should also feel comfortable questioning exactly why your annual policy has increased (aside from inflation rates), despite being covered on the same car.
“Don’t be afraid to challenge them by saying you have found a cheaper quote elsewhere too, as this can often work in your favour.”
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A recent report by the Financial Conduct Authority (FCA) found that firms were not treating their customers fairly.
The report found companies were engaging in a “range of practices” which could make it more difficult for customers to make informed decisions”.
They also revealed that companies were profiting from add ons and extra fees paid by unsuspecting customers.
The FCA has suggested it could soon impose restrictions on any price increase for those renewing a policy.
He has warned many insurers are not on the sites which could see motorists miss out on a wide range of savings.
Martin Lewis has previously warned companies such as Aviva and Direct Line may not be on the site despite offering a range of discounts.
Mr Macnamara said: “It’s important not to head straight to comparison sites when you’re looking to renew your policy or want to switch, as not all providers are on there.
“You’ll find the big insurers incumbents on comparison sites, but often you’ll be able to find great deals by spending a bit of time doing some of your own research, and finding a policy that is actually tailored to you.”