SAVE MONEY on your insurance

A rules revolution is on its way, so be prepared and check if you can get a better deal now

- MARTIN LEWIS

This is a warning for anyone who pays for car or home insurance. There’s a rules revolution coming that is likely to mean the end of cheap switchers’ deals. So this is my clarion call to urgently check now if you can get a better deal.

From 1 January 2022, the financial services regulator’s new insurance rules mean that insurers will have to prove, on aggregate, that they charge their brand new customers the same as existing customers – and that includes any vouchers or cashback.

The aim is to end the loyalty penalty – the fact that those who just renew each year often see their price walked up, meaning that after five years some pay more than double what new customers do.

There’s a ‘but’… firms are unlikely to just cut renewals to match newbies’ prices.

My best guess, based on similar past change, is that firms will drop existing customers’ prices somewhat, but also increase new-customer rates – so they meet in the middle.

There will still be some savings from moving insurer and new entrants trying to disrupt the market, but they’re likely to be smaller.

And while the new regime officially starts in January, as it’s a big job, insurers will likely start to shift pricing algorithms sooner – so the clock is ticking.

You can switch even if not at renewal

Having analysed over 70 million quotes, the sweet spot to check if you can get cheaper prices elsewhere is 23 days before your renewal for car insurance (21 days for home insurance).