Martin Lewis offers advice about cancelling car insurance
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Louise O’Shea, CEO at Confused.com has warned new rules stopping firms from increasing prices for loyal customers could still see some costs rise. Ms O’Shea also said the new FCA rules would not “guarantee” drivers will always receive the cheapest price for cover.
She said: “What we do know is that only those who are shopping around are seeing such significant price drops, and insurers are still increasing renewal prices for their loyal customers.
“While new rules set out by FCA will stop insurers from pricing new and renewing customers differently, this doesn’t guarantee you the cheapest price.
“Changes to the way insurers calculate their pricing, or if prices start to increase across the market, could lead to renewal prices increasing.”
Earlier this year the FCA set out a package of remedies to improve competition across the market.
The move means car insurance firms cannot set renewal quotes higher than new customer rates.
This is set to end “loyalty penalties” or price walking as firms repeatedly increase costs each year.
According to Confused.com, the FCA’s rules will come into effect no later than 1 January 2022.
The FCA said the new rules would make the insurance market “work better for millions of people”.
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However, they have been clear the new rules mean drivers could still make savings from shopping around.
New data from Confused.com has suggested drivers who shop around could save up to £522.
Experts say this is down to a staggering £71 drop in prices over the past 12 months.
In comparison, data from Confused.com shows almost two in five drivers who renewed cover actually paid more.
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