From 1st January 2022, changes to car insurance policy mean that customers are to be charged the same for car insurance regardless of being new or existing customers.
Car insurance quotes must now be the same price whether offered to new customers or existing ones, it has been announced.
The sweeping new reforms, announced by the Financial Conduct Authority (FCA), mean that insurers have to offer renewing customers a price that is no higher than they would pay as a new customer.
The rules aim to end the loyalty premium, where customers renewing each year pay more than new customers who are motivated to switch by cheaper prices.
Incidentally, the same rules will apply to home insurance customers.
The FCA states that its aim is to improve standards of competition amongst customers whether they are new or existing. It says the changes could potentially save drivers billions of pounds.
The FCA’s own research stated that insurance consumers were being overcharged by £1.2 billion a year, with many insurers putting up their premiums for existing customers every 12 months.
Another motivation behind the new rules for 2022 is to protect existing customers with no-claims bonuses, should they have to switch insurers halfway through a policy. Having come into effect on 1st January 2022, they will look to protect customers from what could be described in effect as a ‘loyalty penalty’. The changes are the result of an FCA market study which indicated that millions of UK insurance customers are paying higher prices repeatedly as a result of renewing their existing plan year on year, with 50% of consumers paying more than they should on their annual insurance premiums.
The new rules mean that insurers have to offer renewing customers a price that is no higher than they would pay as a new customer.
Luckily, help is at hand in navigating these newly-announced changes. Arnold Clark Insurance Services (ACIS) helps customers find the best cover, at the best price, from a range of insurance services. With an online quote, get insured within minutes, with a dedicated team that’s ready to give 24-hour support. What’s more, insuring with ACIS means savings on car and van rental, as well as accessories and more.
Browse insurance cover from a range of providers here, and get the best quote that’s in line with the new changes.