News today reports that the Financial Conduct Authority has confirmed that people renewing their home or motor insurance will pay no more than they would as a new customer from January. After years of complaints, the FCA says the move will save loyal customers an estimated £4.2bn over 10 years. Louise O’Shea, CEO at Confused.com comments:
“This is a watershed moment for insurance, and we’re very happy to see the FCA taking action to protect customers. These new reforms will see an end to customers being priced unfairly when it comes to renewal. But this doesn’t stop the need to shop around. These regulation changes simply mean that a company must offer its renewing customers the same price as if they were a new customer. A company’s pricing structure could still change, or a customer’s circumstances could change. And how can you know if you’re definitely getting the best price, if you don’t compare?
“Ultimately, things are about to get very competitive – insurers will be competing to win new business, and so there will be a better price out there for every customer. You could be throwing away money by doing nothing and accepting your renewal price year-on-year.
“The FCA has also said insurers must make it easier for customers to cancel their automatic renewal, whether that’s through a click of a button or a quick and easy phone call. Currently, this process can be lengthy and stressful, which is off-putting and forcing people into accepting their renewal price. This will stop, and this is great news.”
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