HOMEOWNERS and drivers are missing out on big savings on insurance when they renew despite new rules designed to shake up the industry.
Switchers can still save an average of £125 on car cover and up to £29 on home insurance, according to exclusive data analysed by The Sun from comparison site Compare The Market.
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New rules that came into force in January aimed to stop insurers penalising loyal customers by increasing their premiums at renewal.
The change means the best deals are no longer reserved for newcomers.
But Sun Money’s Ellie Flynn reports that millions risk missing out on discounts if they do not compare costs when contracts ends.
Here, we look at what the changes mean.
The new rules
THESE ban companies from charging existing clients more than they would new customers.
It is known as the “loyalty penalty”. But customers may not automatically get a cheaper quote at renewal if their circumstances have changed or prices gone up.
What has happened to prices?
SOME experts feared bills would rise due to the changes as insurers previously offered discounts to attract new customers.
Figures from Compare The Market and GoCompare show prices for car insurance fell slightly as the new rules came in, after steady increases over the past year.
The average policy is now £538, down from £558 in December, says Compare The Market.
Home insurance has also been hit by rising costs — up almost five per cent, says GoCompare, from £162 to £170, as the rules changed.
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Can you still save my switching?
SUN Money has heard from customers who have received renewal letters stating their bills are going down, which was almost unheard of before the change.
Previously you could have saved an average of £257 for car cover and £130 for home insurance by switching at renewal time.
The savings are now smaller, as experts predicted, but it is still worth checking.
Alex Hasty of Compare The Market said: “If your policy is coming up for renewal, shop around and compare policies online to ensure you are getting the best deal.”
Possible savings depend on your circumstances.
GoCompare’s Ryan Fulthorpe said: “It is still worth shopping around for your car insurance — at any age, but particularly if you are under 25.
“Motorists could save up to £265 by comparing quotes.”
James Dalton, of the Association of British Insurers, added: “While these changes could lead to price rises for some who shop around regularly, all customers should get fairer outcomes.”
A spokesman for the Financial Conduct Authority said: “Because of our rules, your current insurer can’t charge a new customer less than you would pay to renew your cover through the same channel. But that doesn’t mean what your current insurer quotes you is the best deal on the market.
“That is why people need to shop around to find the right deal for them.”
What should you do?
SHOP AROUND: Our investigation found there are still deals to be had by looking elsewhere.
If the price of your insurance rises, it is always worth seeing what offers are on the market elsewhere.
HAGGLE: If you find a cheaper price elsewhere, call your current provider to see if they will match it – or even beat it.
Even if there are no cheaper alternatives on the market, you might still get a better price by calling your provider to negotiate.
DON’T OVERESTIMATE MILEAGE: The higher your estimated yearly miles, the more you are likely to pay.
INCREASE YOUR EXCESS: By agreeing to pay more if you are in an accident, you could significantly reduce your insurance premium.
HOME SECURITY: Installing an alarm, video doorbell and updating locks at your property could lower your home insurance costs considerably.
I’ve saved £227 on car cover
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ANNE LARCHY saved £227 by switching her car insurance last month, despite the new rules.
The health lifestyle coach from Finchley, North London, was insured with Aviva Online but decided to shop around when her renewal price shot up by 56 per cent – from £471 to £734.
Anne, 50, said: “I was planning to call and negotiate a cheaper renewal price, which is something I’ve done successfully in the past. But Aviva Online doesn’t have a phone number, so this wasn’t an option.
“Instead, I looked on Compare The Market and found a cheaper deal with Hastings.”
Anne is now paying £505, a seven per cent increase on last year’s price but still a saving of £229.
A spokesperson for Aviva Online said: “The new regulations mean renewal prices will be the same as, or lower than, the equivalent price for a new customer on a like-for-like basis and the renewal price quoted for Ms Larchy was compliant with the new rules.”
They added that prices are based on “several factors” and changes could be due to new information or general changes in the car insurance market.
