Martin Lewis: The BIG insurance rule change is coming - what you need to know before 1 Jan
MoneySavingExpert.com founder Martin Lewis says groundbreaking changes to the way insurers charge new and existing customers are soon to be introduced, which will put an end to the 'loyalty premium' shouldered by consumers.
The clip above has been taken from The Martin Lewis Money Show on Thursday 14 October 2021, with the permission of ITV Studios. All rights reserved. You can turn on subtitles by selecting the keyboard image at the bottom right of the video. You can also watch the full episode on the ITV Hub.
Speaking during the fourth episode of this season’s The Martin Lewis Money Show on ITV, Martin told viewers: "This is the end of the loyalty premium. The end of price walking - the fact that if you automatically renew your insurance they will walk up the price year after year."
The rule changes come into force on 1 January and from then vehicle and home insurance providers will have to charge new and existing customers the same amount upon renewal.
Martin said during the show: "There are six million non-switchers who pay up to 150% more, two and a half times more than new customers."
The MoneySavingExpert chairman said the changes, brought in by the UK financial regulator, are "channel specific", meaning that if you bought your insurance through one price comparison website then "when you come to renew you should be charged the same as a new customer on the same comparison site".
However, there are concerns that the regulatory change will mean prices won't necessarily drop for existing customers. Martin said: "What's actually more likely to happen is that the prices for new and existing customers will meet somewhere in the middle.
"Savings will drop radically for those who compare and switch each year."
Act fast as the window of opportunity to bag yourself a cheap deal is NOW
Tips on finding the best deal
Many can save £100s on their vehicle and home insurance policies. Here's a quick lowdown if you know what you're doing and just want to find a cheap policy:
- For now NEVER just auto-renew – instead get quotes from comparison websites. Comparison sites don't search identical insurers, nor give identical prices, so try as many as you've time for in this order: Confused.com*, MoneySupermarket*, Compare The Market* and Gocompare* (see how we rank 'em).
- Get quotes from direct insurers and find exclusive MSE deals. Direct Line* doesn't appear on comparison sites, and can be competitive. You also won't find some special deals – see hot deals comparisons.
- Then check to see if cashback sites can beat the quotes you got above. Topcashback* gives £40 when you buy through its comparison, and Quidco* £35. But it's also worth checking if you can then up that amount by going direct to the insurer through Topcashback* and Quidco's* normal sites – here you can sometimes get up to £70 per policy.
- For car insurance see if these counter-logical savings work for you. It's worth checking if choosing comprehensive over third party, adding a responsible (often older) extra driver or tweaking your job title can save you cash.
- For home insurance how much you cover makes a difference. Use a rebuild cost calculator to work out how much you need to insure for buildings cover, and a contents calculator so you don't underinsure your contents.
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