More Than stops selling car insurance - what it means for you

More Than is writing to its car insurance customers to explain the next steps after it stopped selling motor cover in September.

The provider announced it was pulling out of the personal motor insurance market after a review, saying it wanted to focus on sectors where it was more likely to 'outperform' its competitors.

But what does it mean for customers and what are your rights when an insurer pulls out of the market or goes bust? Which? finds out.

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What's happening and why?

Following a review of the business, insurer RSA stopped providing car insurance held through its More Than brand from 1 September 2023 - a move worth £120m of annual premiums for the company. 

The RSA explained its decision in a statement, saying it lacked the 'significant scale' needed to succeed in an 'extremely competitive' market. It will instead focus on boosting its business, home, and pet insurance lines. The market exit follows the £7.2bn acquisition of RSA by Canadian insurer Intact Financial Corporation and Danish insurer Tryg in June 2021.

The move comes as figures show the average price of car insurance rocketed by 29% for all drivers over the past year. A combination of 'inflationary pressures' and an increase in the cost of vehicle repairs are blamed for premium price hikes. 

Catherine Carey, head of marketing at Consumer Intelligence - experts in insurance price benchmarking - told Which? that 2023 has been a 'challenging year for the motor insurance market'. She says a surge in used car prices and heightened fraud activities have also contributed to a surge in insurance claim costs and added to current market volatility.

'However, as we move into 2024, we expect stability to regain a foothold in the motor insurance market, for both insurers and consumers,' she adds. 'This, in turn, might make the market an enticing opportunity once again for new brands.'

What does it all mean for customers?

If your car insurance is with More Than, don't panic. All customers will be covered for the full duration of their policy and should receive a letter explaining their options. What happens next will depend on the terms you signed up to.

• With auto-renewal: Customers whose car insurance cover renews automatically when the policy expires will be moved to Swinton Insurance.
• Without auto-renewal: If you chose not to have your policy renewed automatically, then your cover will come to an end on the agreed date and you'll need to search for another provider. The same applies to specialist Low Miler or Smart Wheels policyholders. 

All new and existing claims will continue to be dealt with by More Than (or Low Miler and Smart Wheels) as normal. 

More Than told Which? they are unable to tell us how many customers are affected by the change.

Do you have to switch?

More Than is writing to customers that chose to auto-renew 90 days before the renewal date, informing them of the switch to Swinton Insurance. Swinton is also writing to customers 21 to 26 days before renewal, outlining their new policy and price.

But do some thorough research first to make sure you are happy with the new provider, policy and price. Which? wasn't able to review Swinton in our last analysis, as we didn't hear from enough of its customers who had recently claimed. But you can see how 15 other major providers compared in our guide on the best car insurance companies.

If you're not happy about the switch, you can opt out for free at any time until the end of your existing More Than policy. Just don't leave it until the last minute - your Swinton cover will automatically kick in after the policy end date and you'll then have to pay a cancellation fee to leave. This is £25 if you cancel within two weeks of your Swinton policy starting, and £50 thereafter.

• Find out more: how to find cheap car insurance

What are my rights if an insurer goes bust?

While the process for More Than customers appears pretty smooth and straightforward, what happens if the provider goes bust?

So long as the company is part of the Financial Services Compensation Scheme (FSCS), your policy will either be replaced by a new insurer, so you have uninterrupted cover, or you'll receive a refund based on the cost of the insurance premium portion of your policy. Any outstanding claims should also be covered by the FSCS.

If you think your insurer has treated you unfairly or has broken any rules, it may be possible to make a complaint.  You should always try to resolve the dispute with the company first, but if after following its complaints procedure you have no joy after eight weeks and the insurer fails to provide you with a requested 'final response', the next step is to go to the Financial Ombudsman Service (FOS). 

Making a complaint to the FOS is thankfully pretty simple – just visit the ombudsman's website and fill in a short online form, including as much evidence as you can. 

• Find out more: when to take a complaint to the ombudsman

Always shop around

Whether you're a More Than customer or not, you should also research the market first before buying a new policy.

Shopping around should always be the starting point when looking for the best price and cover to meet your needs. Price comparison sites such as Compare the Market, Confused.com, GoCompare and MoneySuperMarket allow you to view multiple car insurance quotes at a glance. Just remember, not all insurers are on price comparison websites: Which? Recommended Providers Direct Line and NFU Mutual are examples of this. 

It helps to have in mind a list of features of cover that are important to you (and check these features are present in whatever attractive deals you find). For more advice, take a look at our guide on finding cheap car insurance.

Don't choose auto-renewal

To avoid sleepwalking into an expensive new policy, never agree to the auto-renewal clause included in your 12-month car insurance agreement. 

This means that once your initial one-year contract lapses, you will be automatically enrolled for another year. All the details of your initial agreement will stay the same, including your no-claims bonus, add-ons, fees and charges, but your premium could rise.

Although insurers have been banned from charging customers more just because of their loyalty, premiums can still increase if your insurer's costs have gone up (for instance, repairs and parts). And not all insurers are raising prices at the same rate. This could mean last year's bargain cover is now far from competitive. 

To turn auto-renewal off, call your provider directly. It's also worth putting in a calendar reminder 30 days prior to your policy expiring.

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