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Home insurance – never just auto-renew

It’s a fact of life that many policyholders don’t exactly relish thinking about home insurance. The one exception to that is, of course, when something goes wrong and they need to make a claim against it.

What that tendency means is that when it’s time for a home insurance policy to be renewed, it is all too easy to slip into the seductive trap of just allowing the policy to “auto-renew”.

True, that approach is probably the route of least effort. It also avoids needing to think too much about what the home insurance contains or does not contain, plus how much is being paid for it.

Yet those minor advantages are more than offset by the risk of auto-renewing simply resulting in paying far more for cover than is necessary.


It’s not unknown for some insurance providers to offer potential new policyholders some very attractive quotations. They’re typically very keen to attract new business and competition within the industry is high.

Despite regular advice not to select insurance cover based exclusively upon price alone, significant numbers of people will be persuaded by lower prices.

However, it’s important to be on your guard that this isn’t just an initial price reduction only. That’s because some companies may deliberately offer very low prices in the first year or two of a policy’s lifecycle but then start to increase the premiums in subsequent years.

The end result of that is, at least potentially, that by year three, four, or five, suddenly the premium is no longer competitive when viewed against other options in the marketplace.

There is nothing unethical about that practice, although the Financial Conduct Authority (FCA) is taking steps to make it obligatory for insurance providers to highlight that other solutions may be available at annual renewal time each year.

Auto-renewal’s role

To some extent, companies that adopt these practices are relying very heavily on the fact that many policyholders suffer a form of inertia when it comes to annual renewals each year. As mentioned above, the customer simply allows the policy to renew automatically rather than engaging in a conscious effort to compare home insurance options.

Had the new premium been reviewed against other options in the marketplace, the policyholder might well have decided to change their home insurance provider. That process would inevitably focus insurers’ attention on keeping their prices competitive at all times and not just within the first year or two of a policy’s life.

The message here is clear. It’s advisable to compare home insurance options each year or to ask someone to do so for you.

A broad-based review

As we at GSI-Insurance are always keen to point out though, this annual review should not be based exclusively on price. The logic behind this sentiment is the same as that advocated for not selecting a policy in the first place based on price alone.

What is best or cheapest for someone else might not be best or even suitable for you. Therefore, during your annual review, the fact that you can see other policies that are lower cost does not necessarily mean that it will be advisable to change.

It’s important to look at what your existing policy is offering against what a lower-cost alternative is providing to be sure that you understand the suitability of the competing product when measured against your unique situation.

It’s probably fair to say that comparatively few policyholders might view the prospect of an annual review with any great enthusiasm. Understandable as that may be, it’s worth keeping in mind that the sums you might save by avoiding simply auto-renewing each year might become considerable over the course of time.


It really may be worth putting aside a comparatively small amount of your time each year in order to compare home insurance propositions. It may confirm whether or not your existing policy is still both suitable for your situation and financially attractive.

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