From January next year, auto, motorcycle, van and home insurers will be prohibited from charging existing customers more than new customers under a tactic also known as “price walking.”
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Drivers are encouraged to check their car insurance policies now ahead of the new walk-in rate rules from January – which could affect how much you pay each month.
Starting next year, a new insurance campaign is coming into effect, preventing companies from charging loyal customers more fees when renewing.
All cars, motorcycles, trucks and home insurance are affected. This move marks the end of the so-called loyalty premium, also known as “walking on price.”
This means that new and existing customers will pay the same rates – eliminating any additional fees for sticking with the same company.
However, there are caveats that may mean higher prices for new customers.
“The rules aim to end the loyalty bonus, as those who renew each year pay more than new customers who convert because they are offering them cheap rates to do so,” Martin Lewis explains in the latest MoneySavingExpert newsletter.
“My best guess is that companies won’t cut renewal prices to match entry-level prices – prices will meet near the middle. This means that the savings from switching will likely be proportionately reduced.




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“Insurance companies could have already made price changes knowing this was imminent. However, I heard many are waiting until December to see what their competitors are doing.”
As a result, Lewis says, everyone should start shopping now.
“Unless you’ve had all the checks done in recent months, try now To see if a cheaper transformer deal is available before the new rules are in place.
On average, MSE estimates that 23 days prior to renewal is the optimal time to compare prices. For home insurance, the ideal point is 21 days before your policy expires.
The reason for this is that if you leave it until later, insurance companies will classify you as a high risk person and charge you higher fees.
Even if you’re not close to renovating, it can be worth shopping, as if the savings are high enough, you can still pay the exit fee and move elsewhere.
If you find that you can save significantly, start a new policy, cancel the old policy and request a refund for the time period due.
Provided you haven’t claimed, you should get a pro-rata refund minus around £50 in administration fees.
We have a complete guide on how to shop for car insurance here.
New Loyalty Punishment Ban from January 2022
Most insurance companies increase their rates for existing customers upon renewal in a practice known as price walking.
They use complex processes to target the best deals to customers who they believe won’t convert in the future, and therefore will pay more in the long run.
This is actually known as the loyalty penalty – a practice the new rules hope to eradicate.
It’s also part of the reason why people are encouraged to shop and switch every year.
At the same time, these companies offer below-cost prices to new customers to attract them.
The FCA’s new rules will ban price walking from January next year.
In short, this means that your renewal price should not be higher than it would have been if you joined the same company as a new client.
It said the measures would save consumers £4.2 billion over 10 years.
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