Get insurance quotes now
With a change in regulations coming, it could mean price hikes next year
Everyone should get insurance quotes now, says finance pundit Martin Lewis.
Even if your policy is not near renewal, it may well pay to get a quote in the bag ahead of a potential spike in prices.
New year, new policy
On 1 January 2022, the insurance regulator, the Financial Conduct Authority, brings in new rules. The rules aim to end the loyalty premium. This is where those who renew each year pay more than new customers who switch from another provider.
Insurers must now be able to prove, on aggregate, they charge new and existing customers the same ‘channel’ price. This also includes vouchers or cashback incentives.
The ‘channel’ bit means, for example, companies can still charge different prices on different comparison sites, or between phone and online for example. Online prices are usually cheaper.
Martin Lewis believes the new rules could see companies putting up the prices across the board to compensate.
“My best guess is firms won’t just cut renewal prices to match those for newbies,” states Lewis. “Rates will meet nearer the middle (as happened in 2012, when insurers were barred from gender price discrimination). This will mean savings from switching will likely relatively reduce.”
It wis possible insurers have already made price adjustments knowing the changes are coming. But Lewis believes many insurers are waiting to see what other’s do. This means they might be able to pick up new, dissatisfied customers.
Lock in a cheaper deal
Unless you’ve done all the checks in recent months, Lewis believes it’s worth getting some quotes. This is true even if your insurance is not quite at renewal stage. If a cheaper switchers’ deal is available before the new rules hit, you can often lock in the quote price before the new rules hit. Timing matters though…
- 23 days before is the sweet spot for car insurance (21 for home). If you are close to renewal time, analysis of over 70m quotes shows the optimum time to get quotes and to sign up to a new policy is 23 days before renewal on car cover. Delay and prices can almost double, as insurers’ algorithms show later quote-getters are a higher risk.
- Not near renewal? Still check, as if it’s a lot cheaper, you can usually switch & save. Find a cheaper policy and you can usually cancel your existing one, and as long as you’ve not claimed/reported an incident this insurance year, you should get a pro-rata refund for the remaining time minus a small admin fee (double check your policy notes).
Eight steps to speedily find your cheapest insurance
Martin Lewis advises:
- Check at least two comparison sites. That’s because they don’t all include the same insurers, and even when they do, they can have different prices (as long as it’s not more than their direct price). So check as many as possible. You can pick via their perks, or our current assessed order below – either is fine – the real key is trying more than one.
– Confused.com* (£20 Halfords/Lidl voucher)
– Compare The Market* (2for1 cinema & meals)
– MoneySupermarket* (up to £150 off car repair/MOTs/servicing)
– Gocompare* (‘free’ £250 excess).
- Compare other insurance companies such as Direct Line which do not use comparison sites. =
- More than one car in the household? See if a multi-car policy is cheaper (you can’t do this via comparison sites).
- Three counter-intuitive checks to make.
– If price is key, check if comprehensive is cheaper than third party.
– See if adding a responsible extra driver cuts costs.
– See if tweaking job description cuts costs.
- Check if you can get cashback. Cashback sites can give up to £80 after you’ve found your winning policy (always do it that way round).
- Want to stay where you are? Haggle. Take the best price you’ve got to your existing insurer and see if it’ll match it.
- Struggling to find affordable cover? Try a broker. If a string of claims, a medical condition, or points on your licence are stopping you finding cover, comparison sites are unlikely to be great. So try to enlist a broker who may be able to get you more personalised cover.
- Always check the policy is right for you (and complain if a claim’s unfairly rejected). Try to read at least the policy summary before signing up, and ensure insurers are regulated by the Financial Conduct Authority.
Read more here.