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Drivers warned over auto-renewal confusion

Article by Simon Christopher
Posted: 29/4/2012 - Last updated: -
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Motor insurers have been accused of not being clear enough with consumers about policies automatically recurring.

As it's now illegal to be without car insurance even when not driving (unless the car is formally declared to be "off the road"), automatic renewals can help avoid customers committing an offense.

However, insurers must meet two rules if using this system. Firstly, they must inform the customer of the automatic renewal when they take out the policy. While insurers do this, it's too often buried in small print rather than made clear.

Secondly, insurers must give the customer a reminder of an upcoming renewal and offer them the chance to cancel the policy. Generally this should be done with at least three weeks' notice before a policy ends. However, the This Is Money site has uncovered several insurers sending a letter that is vague or misleading, in some cases telling customers the policy had already been renewed.

In some cases, customers don't realise a policy will be automatically renewed unless explicitly cancelled and wind up with two active policies at the same time.

It's worth remembering that customers who take out insurance have the right to cancel within 14 days (assuming they don't make a claim) and get a complete refund. This rule also applies when a policy is renewed.

PLEASE NOTE: News items are intended for information only and should not be relied upon when making insurance decisions. Due to their nature, some of the information in news stories including any references to taxation, legislation, regulation, or other issues may no longer be current.

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