Auto-renew is a great backup facility for people who have busy lives or a tendency to forget things. It is a very smart solution for car insurance companies. Who could complain about a customer who has already arranged to pay for the next shipments? However, this can turn into a costly mistake, if it turns into complacency and motorists habitually let their policies renew automatically, without the need to even have a quick glance at it.
The logic behind is pretty simple that can be over-simplified. Think about setting up a weekly grocery order and payment plan with your local supermarket. Unless you call them up and tell them that you don’t want any more deliveries, they will keep bringing you the same grocery items on the list and charging the total amount calculated based on prices at the time of delivery.
People can see the problems with this arrangement with grocery shopping. Yet, they struggle to see the problems with car insurance automatic renewal arrangements. Also, it is not an item like milk, bread and apples that you can touch and see if it is good enough for you. You will only understand if it is sufficient when you have a claim. That makes it hard to measure and therefore okay either way.
However, many people would want to go to the supermarket themselves to see different products, if there are special offers like buy one get one free. Also, they can easily tell that their requirements and tastes are changing every day. Now they like a softer cheese, semi-skimmed milk instead of full-fat. In time, they change the grocery store as well. Now instead of going to butcher, baker and fishmonger they only go to one large store.
The same changes in circumstances and requirements happen on vehicle insurance, albeit in a slower fashion. Having a payment in place must not be an excuse to ignore them. It must only be used as a backup plan not to miss the payments and be without the essential and legally required coverage.
Motorists should check if they need changes on their policies and if there are better deals offered by another firm beforehand and determine how they like to proceed in time. Letting these decisions slide is easier when the continuity is a given. People already think that shopping around for vehicle insurance is a boring and tedious task and they are reluctant with it. Adding the feeling that they don’t have to do anything about it to continue creates an easy way out.
If policyholders aren’t bothered to look, insurers cannot be blamed for leaving things as they are. Indeed, some motorists realize that they are kept in old rates and products and they don’t benefit from the latest discounts and policy offerings, although companies often offer better packages and pricing for new customers. Often, attractive offers and deals come with the warning; “new customers only”.
Some motorists may mean to do something about it but they let it sit too long and another chance is gone. The auto-renewal facility psychologically makes it a non-urgent issue to deal with in time. Insurers cannot really be blamed since they have sent the terms in time for the customer to check and act on it.
You may be using this facility the right way and making sure that you make adjustments to your automobile insurance policy as and when needed. Also, shopping around to find the best deals and switching if it serves you better. Then it is great and you have the best of both worlds.
However, there are many unassuming people who take car insurance automatic renewal as an easy way out and get into the routine of it. You may let it slip once or twice if you have shopped around thoroughly the last time you checked. However, you may stand to lose discounts of as much as twenty percent if it becomes a habit to let it slide. Furthermore, you may neglect to have a good look at the coverage and make changes as well.