Martin Lewis shares 12-step car insurance warning ahead of huge price shake-up

From January 1, 2022, car and home insurance providers will be banned from charging existing policyholders more than new customers – but it may not necessarily mean cheaper deals for all

Martin Lewis has explained what you need to know about changing insurance rules

Martin Lewis has shared his 12 “need to knows” about car and home insurance before a huge price shake-up.

New rules designed to end the insurance “loyalty premium” – where customers who automatically renew pay more than new customers – are being brought in from January 2022.

The finance watchdog, the Financial Conduct Authority (FCA), estimates Brits could save £4.2billion over 10 years because of the insurance shake-up.

But the changes may not necessarily mean cheaper bills for absolutely everyone, according to Martin, as it could mean an end of cheap new customer deals.

We explain the 12 tips from Martin, as shared in the latest MoneySavingExpert newsletter:

New rules to end the ‘loyalty premium’ from January

New rules want to end the loyalty premium for existing customers


Getty Images)

From January 1, 2022, car and home insurance providers will be banned from charging existing policyholders more than new customers.

The idea is that it will stop loyal customers who don’t want to switch insurance providers from being ripped off.

It comes after an investigation in 2018 found 6million loyal policy holders would have saved £1.2billion had they paid the average price for their actual risk.

Have you saved £1,000s on your car or home insurance and want to save how you did it? Let us know: [email protected]

But it could mean the end of cheap switch deals

The changes, in theory, should mean existing customers should pay less when they automatically renew their insurance policy.

However, Martin has warned that insurance firms could increase new customer rates as a result – spelling the end of cheap new switcher deals.

He said: “My guess is firms won’t just cut renewals to match newbies’ prices.

“They’ll drop ’em somewhat, and increase new-customer rates – meeting towards the middle.”

Of course, it is hard to know for sure how prices will be affected until the new rules come into force.

Rates may change before January – so check now

Pricing for home insurance is changing from January


Getty Images/RooM RF)

Martin predicts many insurance firms will start to change their pricing structures before January – so it may mean some cheap deals start to disappear in the next couple of months.

With this in mind, it may be worth checking if you can lock into a cheaper deal, or match your existing price, now.

You can switch your insurance even if you’re not at renewal you’ll need to cancel your existing policy.

But keep in mind that no one knows what January prices will look like until the new rules officially come into place.

Use multiple comparison websites for the best price

Don’t just stick to one comparison website when checking insurance prices – use multiple resources.

This is because some insurance firms won’t be covered across all the major comparison websites, so you may end up missing out on deals if you don’t shop around.

Some of the most popular ones include, and

Check directly with insurance providers as well

Not all insurance providers are on the major comparison websites – for example, Direct Line doesn’t list its deals anywhere other than its website.

So if you tend to stick with a particular company, check its website to see its latest prices.

Look for quotes 23 days before your renewal

MoneySavingExpert says 23 days before your car insurance is due to expire is the prime time to find the cheapest deals.

For home insurance, you should be checking 21 days before.

Leave it later and car insurance prices can almost double because insurers will view those who renew at the last-minute higher risk.

Can you benefit from multicar deals?

If your household has more than one car, you should check if a multicar deal could save you cash.

Sadly, multicar insurance policies aren’t included on comparison sites so you’ll need to contact insurance firms directly to find out their prices.

There are also multi-policy discounts, reducing the cost if you’ve two cars, or get car and home insurance together.

Check if you can claim cashback

Cashback sites will often advertise insurance deals – and MSE says you currently get up to £70 back.

Cashback sites do as their name suggests. They give you money back when you make a qualifying purchase.

You usually need to make the purchase through a cashback website and then upload your receipt.

Two of the best known cashback sites are Topcashback and Quidco.

Third party isn’t always cheapest

You may automatically assume that comprehensive car insurance always costs more than third-party – but Martin says this isn’t always the case.

Martin said: “Comprehensive cover may undercut third party, as while it covers more, the mere fact that you selected it can change insurers’ views of your risk profile to outweigh that.”

Check the wording of your insurance policy carefully to see what each cover protects you against.

Comprehensive will offer the highest level of cover, while third-party usually only covers damage caused by someone else.

Make sure you buy the correct home insurance

Always check the wording of your policy to make sure you’re fully covered


Getty Images/iStockphoto)

Martin has urged insurance customers not to “overinsure” their property when it comes to building insurance.

You should only cover the cost to rebuild it if knocked down, not to buy it, he says.

Homeowners should also be sure not to “underinsure” their belongings in terms of contents insurance, as you may not get a payout.

Always try to haggle

If you’re happy with your current insurance provider, you can still try haggling for a lower price.

Check if there are cheaper deals out there, then call your provider up and ask if they can match it.

While haggling is never guarantee to always work, it doesn’t hurt to ask.

Make sure the policy is right for you

Martin recommends you go through your policy with a fine-tooth comb to check what it covers to make sure you’re happy with it.

You should also check your insurance provider is regulated by the Financial Conduct Authority.

Read More

Read More

Most Related Links :
todayuknews Governmental News Finance News

Source link

Back to top button
Native News Post