Has your insurer hiked your premiums? Find out how to redress the balance at renewal time.
In January 2022, insurers were banned from reserving their best prices for new customers. This called time on a widespread practice known as ‘price walking’ – where the longer you stayed put with an insurer, the more it charged you.
This is hopefully in the past – but you’ll still potentially lose out if you let your policy renew without checking if it’s a good deal.
Here we explain how renewal works and how you can stop your premium from rising.
What is auto-renewal?
Like car insurers, many home insurers have auto-renewal clauses in their policies.
This means that, unless you make it clear that you don’t want to renew, your cover will roll over automatically at the end of the policy.
Your home insurer will provide you with a notice of renewal before you’re signed up for another year. This is usually sent by post, outlining the full details of your new policy, the premium you will pay, and what you paid last year.
The document will also explain how you can cancel and how long you have to change your mind. Most companies will contact you at least 21 days before your policy is automatically renewed.
We also recommend setting a reminder to yourself in your calendar, a couple of weeks before your policy is due to renew.
Will I be charged a renewal fee?
Renewal fees in the home insurance market are pretty rare, but some companies will charge them.
Be sure to read your policy document carefully to make sure you are not stung.
- Find out more: home insurance: add-ons, fees and charges explained
What is a pre-renewal deposit?
Some home insurance providers automatically take a deposit from you ahead of renewal in attempt to secure your business for another year.
The payment, usually one month’s premium, only applies to pay-monthly customers and is taken from your account a month before renewal. The amount is deducted from next year’s premium if you decide to stay on.
If you know your home insurance policy is coming up for renewal, check with your provider for pre-renewal deposits to avoid being caught off-guard.
It’s usually cheaper to pay for insurance annually rather than monthly, as many providers charge interest. You can see which do and don’t in our home insurer reviews.
How to haggle for a cheaper premium
When faced with a high renewal premium, switching to a different insurer isn’t your only option.
Our research has found that haggling with your home insurance provider will successfully reduce your premium the majority of the time.
Checking what other insurers are offering beforehand will help you haggle.
We also have a tried-and-tested haggling script to help you prepare for the negotiation.
- Find out more: how to find cheap home insurance
Can I cancel if my policy accidentally rolls over?
You can cancel your home insurance policy, but it will probably come at a cost. You’ll have a 14-day cooling-off period once your policy has started, and most insurers will let you cancel during this period, only charging you for the cover you have used.
Some providers, however, will still charge an admin fee if you cancel in the first 14 days. Our research found the size of this admin fee to range from £20 to over £40, where charged.
Charges are more likely and can be substantially higher (as much as £58) if you cancel after the cooling-off period. So if you do intend to switch, the best time to do so is at renewal – not afterwards.
When should I start looking for a new home insurance policy?
Eleven months into your policy is a good time to start looking for new home insurance cover. Follow our full tips to finding cheap home insurance.
Once you have found a good price, you could either take out a new policy or use it as leverage to haggle down the premium quoted by your current provider.
Some providers, such as NatWest, Saga and Royal Bank of Scotland, offer policies where premiums are fixed for more than a year. While this can bring peace of mind, you should compare with other providers to make sure it won’t cost you much extra.
The cost of cover may still increase if you make a claim or if there is an increase in insurance premium tax, so make sure, if this happens, you explore all possible alternatives at renewal.