Insurance providers must show previous year’s premium when quoting renewal costs
Under new legislation introduced on April 1, insurance providers are now obliged to show how much a customer paid for their insurance the previous year when showing them the renewal quote.
This new transparency allows motorists to assess the difference in costs between the previous year’s premium and the renewal quote. If the quote proves to be a significant increase, then a customer has the chance to shop around for a better deal.
The new regulations have been introduced by the Financial Conduct Authority (FCA), to force insurance providers to become more open about renewal quotes.
According to recent research carried out by comparison website comparethemarket.com, British motorists are handing out an unnecessary £2.7 billion per year to insurers due to not shopping around for a cheaper renewal deal. The research suggests only 40% of car owners swap providers each year.
The FCA has stipulated that, when in correspondence with their customers in relation to renewal quotes, insurers must clearly state how much the customer paid for their premium last year and also inform them that a better deal could be had if they went elsewhere for a quote.
Insurance providers must alert their customers to the upcoming renewal date, and the cost of the renewal, 28 days before the current policy comes to an end.
Comparethemarket.com claims the first two weeks of this 28 day period is the best time to shop around for a cheaper insurance quote. Despite this, the research shows that 23% of motorists wait until the very last day to search for a better deal.
According to the comparison website, motorists can save a not-so-insignificant sum of £349 by changing providers sooner rather than later, or by bargaining with their current provider well before the end of the 28 days.
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