Moves are underway to protect British consumers from loyalty penalties in motor and home insurance, potentially saving customers 4.2 billion pounds in the next decade.
SOME insurers sneak up prices for existing customers when they renew policies each year. This means people have to spend hours looking around for better deals and are often offered bargain prices only to find themselves in the same position the following year when the price of the policy goes up again.
The Financial Conduct Authority (FCA) said it would create new rules to ensure consumers renewing quotes for home and motor insurance are not charged more than new customers.
“It is likely that firms will no longer offer unsustainably low-priced deals to some customers,” the FCA said.
There will also be new rules making it easier to cancel automatic policy renewals.
The Association of British Insurers (ABI) said they welcomed the announcement.
“It is vital that the new rules are applied across the whole insurance market, including price comparison websites and insurance brokers, with a uniform level of supervision and monitoring by the FCA, to ensure good customer outcomes,” said Charlotte Clark, director of regulation at the ABI.
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