Autoscommunity
Motion & Emotion

New Rule to Protect Drivers Against Rising Insurance Costs

1,427

The Financial Conduct Authority (FCA) will introduce a new rule in the new year to prevent insurance companies from discriminating against loyal customers in favour of new business. 

Insurance providers often offer introductory prices to new customers to lure them in but then increase when the policy is renewed. This practice is called ‘price hiking’ and means that customers are penalised for being loyal to a company. To get the best rates, you need to shop around every year.

Advertisement - Zuto Car Finance

Of course, insurers can still increase premiums if a customer’s risk changes, for example, because they had an accident that year.

The rule change was proposed in 2020 when the FCA asked for feedback. It will come into force on 1 January 2022, with detailed changes to the law’s wording.

Advertisement - Lexus NX

The FCA estimates that the new rules will save consumers £4.2 billion over ten years. Another benefit is that people will no longer switch insurers every year to get the best deal.

Sheldon Mills, Executive Director, Consumer and Competition at the FCA, said: “Our interventions will make the insurance market fairer and make it work better. Insurers can no longer penalise consumers who stay with them. You can still shop around and negotiate a better deal, but you will not have to switch to avoid a loyalty premium.”

Advertisement - Toyota Land Cruiser GR Sport

As well as banning price gouging, the FCA is introducing rules to make it easier to cancel an insurance policy. One change is that insurers must give customers the option to refuse automatic renewals.

Advertisement

UP IN NEWS

Advertisement


For all the latest automotive news, reports, and reviews, follow us on Twitter, like us on Facebook, subscribe to our YouTube page, and follow us on Instagram, which is updated daily.


Advertisement

Stay Ahead of the Curve

Unlock the World’s Leading Source of Automotive News and Analysis.

Autoscommunity.com provides innovative marketing and advertising solutions to support an advertiser’s specific campaign objectives. Customized programs leverage the best of Autoscommunity.com. Contact our sales team today and see what our team can do for your custom advertising solutions.

Advertisement

Please include a contact number if you are willing to speak to our sales team. You can also get in touch in the following ways:

Safety reminder – Please buckle-up! Seat belts save lives every day.  Always wear seat belts and use appropriate restraints for all child passengers.

Advertisement

Think Your Friends Would Be Interested? Share This Story!

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More