Despite a new ruling against price walking, car insurance renewal premiums may still climb.
If firms modify the way they compute their prices as a result of FCA rule revisions, car insurance renewal prices could “increase.”
Confused.com CEO Louise O’Shea has warned that new restrictions prohibiting companies from raising rates for loyal customers may result in some cost increases. Ms. O’Shea also stated that the new FCA guidelines do not “ensure” that drivers would always get the best deal on insurance.
“What we do know is that only those who shop around experience such big price reductions, while insurers continue to raise renewal pricing for their loyal customers,” she said.
“While the FCA’s new rules will prevent insurers from charging different rates for new and renewing customers, this does not guarantee you the best deal.
“Changes in how insurers calculate pricing, or if prices begin to rise across the industry, might result in higher renewal prices.”
The FCA announced a package of remedies to improve competition across the industry earlier this year.
As a result of the change, vehicle insurance companies will no longer be able to raise renewal rates above those offered to new customers.
This is expected to put an end to “loyalty penalties” or price walking, which occur when companies increase costs year after year.
The FCA’s restrictions, according to Confused.com, will take effect on January 1, 2022.
The new rules, according to the FCA, will make the insurance market “function better for millions of consumers.”
They have been clear, however, that the new rules mean that drivers can still save money by shopping around.
According to new Confused.com research, drivers who shop around might save up to £522.
This, according to experts, is due to an astounding £71 decline in pricing over the last year.
According to Confused.com, nearly two out of every five drivers who renewed their insurance actually paid more.
It’s Kwik Fits’ Midsommer Madness promotion, which means you can save 10% on your MOT Test with the UK’s #1 MOT tester if you book online.
A total of 38% of road users stated their insurance company had raised their rates by an average of £44.
Over half of those surveyed said they choose to stay with their existing insurer despite the possibility of paying extra.
Meanwhile, 15% said it was difficult to cancel their renewal and that they were forced to pay the additional charges.
“Car insurance premiums have been regularly reducing for some time now,” Ms O’Shea remarked.
“Our research indicates that there have been several changes.” Brinkwire Summary News”.