Martin Lewis warns that new auto insurance guidelines have an effect on each driver – Liverpool Echo
Martin Lewis warned anyone who gets auto insurance.
Earlier this year, the Financial Conduct Authority announced several new rules to improve competition and protect home and auto insurance customers from loyalty penalties.
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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Many companies increase prices for existing customers every year when they renew, this is known as price walking.
This means that consumers have to shop and switch every year so as not to pay higher prices for their loyalty.
The FCA found that millions of home and car insurance customers are losers if they repeatedly renew with their previous providers.
In 2018, 6 million loyal policyholders would have saved £ 1.2 billion if they had paid the average price for their actual risk.
The remedial measures related to pricing, auto-renewal, and data reporting will take effect on January 1, 2022. The rules on systems and controls, product governance and premium financing came into force at the end of September 2021.
The regulations concern car and home insurance.
But Martin said now might be the best time to look for a cheap deal.
In his latest newsletter, he said, “While the new regime officially starts in January, insurers will likely start changing their pricing algorithms sooner, so the clock is ticking and the cheapest prices may go away within weeks or months.
“If you can, you must cancel your existing policy, provided you have not submitted or reported any claim in this insurance year.
"You should get a pro-rated refund for the remainder of the year, minus a one-time administration fee of £ 30-50. Take this into account in any savings.
"However, you may not deserve this year's no-claims bonus.
“Even if you can't save now but can meet your current price, it may be worth doing if prices go up. This is a much shakier area, however, as it will require some crystal balls for you. "
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