Drivers and homeowners save up to £100 a year switching deals
Insurance customers are saving up to £100 on car and home policies each year by shopping around following the introduction of new renewal rules making it easier to compare prices.
Around 1.4 million extra drivers and homeowners have been prompted to shop around a year after new rules by the Financial Conduct Authority (FCA) forced insurers to show last year’s premium on renewal notices.
Data from Consumer Intelligence revealed that around 300,000 more drivers compared prices for car insurance as numbers shopping round rose to 85.1% from 84.1% previously while 1.1 million more home insurance customers compared prices at renewal, rising to 77.6% from 74.6%.
As such, drivers comparing prices have been able to save around £64, while for householders, the savings add up to £34, according to the research.
But Consumer Intelligence’s survey of 7,600 customers also found an increase in those who compared prices but who decided to stick with their insurer, suggesting that a threat to switch away prompted an improved deal.
However, loyalty costs the longer customers stay with their provider.
Car insurance customers who’ve been with the same insurer for eight years can save nearly £131 while householders will save around £119 by moving after seven years.
The table below shows the average savings for car and home insurance customers depending on how long they’ve been with their provider:
William Davis, insurance analyst at Consumer Intelligence, said: “Consumers are better informed than ever and the FCA has made it clear it is keeping a close eye on whether firms are adequately displaying the previous year’s premium at renewal.
“The regulator hoped that drawing consumers’ attention to what happens to their premiums at renewal would promote competition and ultimately help to wean insurance brands off dual pricing, whereby new customers get the best prices and loyal customers pay more.
“If its warnings continue to prompt increased shopping, the dual pricing problem might just follow slowly behind.”
Consumer Intelligence added that pricing pressure across the insurance market has made it tougher for insurers since the new rules were introduced.
Around 85% of motor customers questioned were quoted higher prices and 61% of home customers saw premiums increase.