"Don't Get Difficult": Auto Insurance Loyalty Lure May Make Drivers Pay £ 450 Extra – Every day Specific

New analysis has shown that more than 50 percent of people were affected by increased car insurance premiums in the past 12 months at the time of renewal. This has an average price of £ 81, with drivers being warned of major insurance changes due to come into effect in January.

In contrast, new customers who have switched providers pay an average of £ 262 less for car insurance and £ 113 less for home insurance than those who stay year after year.

This means that some people who have auto-renewed both home and car policies may pay £ 456 more for their insurance than those who shop.

New rules of the Financial Conduct Authority (FCA) come into force on January 1, 2022 and are intended to protect customers from the loyalty penalty.

This includes new regulations so that extension offers for consumers of household and motor vehicle insurance are not more expensive than for new customers.

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Ursula Gibbs, Director at Comparethemarket.com, commented on the changes and the impact on drivers.

She said, “Although the upcoming changes in insurance prices should end the loyalty penalty, people should be careful not to fall into the trap of assuming they are getting the best deal.

“The gap between those who automatically renew and those who shop around is now hundreds of pounds, illustrating the importance of people continuing to compare prices to make sure they are getting the best deal available.

“Shopping online and switching providers regularly is one of the best ways to ensure you don't overpay and save hundreds of pounds each year.

"Don't be complacent about your renewal price; Check if you can get a better deal elsewhere. "

There are also fears that insurance prices could rise as more cars are on the road after the coronavirus lockdown.

Insurance premiums for new customers have fallen in recent months as providers compete for new business ahead of the regulatory change.

Likewise, over a quarter of households said their premium with their existing provider had decreased by an average of £ 56 at the time of renewal.

Regarding the upcoming changes, Sheldon Mills, Executive Director, Consumers and Competition at FCA said: “These measures will put an end to the very high prices of many loyal customers.

“Consumers can still benefit from shopping or negotiating with their current provider – but they will no longer be charged when they renew just because they are an existing customer.

“We're making the insurance market work better for millions of people.

"We will be watching closely how the market moves in the future and to ensure that companies continue to provide fairer value to consumers."

The changes are expected to take effect in January 2022.

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