HOUSEHOLDS are being warned to either renew their home and car insurance in the coming weeks or face wasting hundreds of pounds.
New rules next year will not allow insurers to charge existing customers more than new customers when they renew policies, but many are being overcharged ahead of the changes.
There are no awards for loyalty when it comes to insurance.
You could end up paying hundreds of pounds more for home and car insurance if you let the policy auto-renew with your current provider.
City watchdog the Financial Conduct Authority (FCA) has introduced new rules from January 1, 2022. Forbid insurance companies from offering new customers better deals than loyal customers.
But there’s no protection if you renew your home or car insurance in the next few weeks.
Research by comparison site Compare The Market has found people risk paying more than £450 when trapped in an insurer’s loyalty trap.
Its analysis found that half of households have seen their premiums go up when sticking with their current provider at the time of renewal over the past 12 months to an average of £81.
In contrast, new customers switching to a paying provider averaged £262 less on motor insurance and £113 less on home insurance than those who stayed, a total savings of 456 pounds.
There are warnings that a ban on charging existing customers more than new customers could lead to price increases for everyone.
MoneySavingExpert Martin Lewis said this makes it all the more important to Shop around for new insurance deals if your policy expires this month.
How to cut your insurance costs
Compare Marketplace estimates that households and motorists can often pay £375 less for home and motor insurance by shopping around for a cheaper insurance deal.
Your insurance company will usually send you a letter three to four weeks before your policy ends to offer you a new rate.
Unless you’ve opted out, your policy will roll over to this rate for another year after your contract ends.
You don’t have to accept this.
Instead, you can use this renewal letter to compare prices elsewhere.
Use a comparison site to see if other providers can beat what you’re being offered.
You should check out a few comparison sites as they may have offers from different providers.
There are also some insurance providers such as Direct Line that are not available on comparison sites, so you can also check directly if you can save.
How to make sure you don’t get penalized for loyalty
The best way to beat the loyalty premium is to check if you can convert and save.
These are some of the best sites to use to find a better deal for your supplier. Remember, though, if you’re thinking of converting before the deadline expires, you may have to pay an early exit fee.
To compare home insurance, you’ll need to provide information like your address, property value, security features you’ve installed, how much your property is worth, and claim history. before.
Shopping around for construction and interior insurance for your home could save you £113 annually, according to Compare The Market.
Motorists who purchase car insurance will need to provide detailed information about their vehicle, where it is kept, as well as your age, occupation, driving history and track record.
You can save up to £262 by buying car insurance, Compare The Market claims.
Once you have an idea of the different rates, it’s a good idea to call your current insurance company to see if they can beat the premiums offered.
If your insurance company can’t give you a better deal, then you can switch to someone else.
A comparison site can often help manage the move to a new provider, you’ll just need to provide your bank details and agree on the excess requirements you’re prepared to pay.
Last month, we advised drivers to renew their insurance exactly 20 days before expiration days – it can save you £306 on average.
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https://www.thesun.co.uk/money/16916344/check-insurance-bills-now-or-face-paying-450-extra/ Brits warn to check insurance bill NOW or pay £450 more next year