Home and motor insurance costs are coming under new laws from 1 January to protect consumers.
Policy renewers won’t pay more than they would as new customers, as laid down by new regulations from the FCA, the Financial Conduct Authority. So prices for regular supplier switchers will rise, while long-standing customers can enjoy lower charges.
The policy has been introduced to end the trend of “price walking”, where a customer’s charge is raised annually despite no change in the policy.
The new rules are being brought in by the FCA in 2022 after complaints registered by Citizens Advice about customers being penalised for their loyalty, while those who switched unfairly got better deals.
An estimate of 10 million customers currently hold home and motor insurance policies that have lasted for five years or more.
MoneyMagpie’s Jasmine Birtles says, “It’s really good that insurance companies are being forced to give loyal customers a fair deal. However, it’s still a good idea to shop around when you come to renewing your policy as there is a lot of competition around and it’s quite possible that a different company will offer you a better deal.”
People will still be able to shop around for the best deals, but must consider if the policy is suitable to their personal requirements.