2022 – Car insurance companies use loopholes to keep costs high for loyal customers | car insurance

According to motorists who contacted Guardian Money, car insurance premiums for new customers are up to twice as high as those for new customers, despite the recent ban on loyalty penalties.

The customer was informed that their renewal premium would be £368.74, but similar coverage from the same company was set at £215.22 on a price comparison website. When he complained, the renewal price was lowered to £245.

Since January 1, insurance companies have been prohibited from charging loyal policyholders excessive fees to fund rebates to attract new customers. According to the Financial Conduct Authority (FCA), which implemented the ban, the 6 million customers who stayed with their provider saved £1.2 billion in 2018.

“It’s hard to tell if insurance companies are playing games,” says Martin Lewis, founder of MoneySavingExpert. Photo: Antonio Olmos/The Guardian

However, consumers who assume the ban will allow them to stand up without paying a price may be in for a shock. Gaps in the new rules mean that they may still spend more to renew an existing policy rather than buying a new policy from the same provider. Companies are still allowed to differentiate between new and existing customers based on when and how the bid is requested.

Martin Lewis, founder of Sparexperte, says that while some loyal consumers will save money thanks to the new rules, they may struggle to know if they are being charged fairly. ‘Which – which [loopholes] It means there is some wiggle room in the system, which makes it hard to tell if insurance companies are playing games,” he says.

An FCA spokesperson says consumers should stay informed. They added, “We use a range of tools to assess company compliance, including comprehensive analysis of company reporting data, consumer and market information.”

There are many hidden factors that can increase the price for existing and new customers.

who – which ‘Channel’

Businesses are still allowed to differentiate between new and existing customers based on when and how they apply for an offer. Photo: Kevin Weil/Almy

This is technical language for the method you use to request an offer. A channel can be a call center, mobile building, insurance company website, or price comparison site. Insurers only need to ensure that the renewal premium offered to the new customer matches when applying for a reciprocal policy through the same channel that the existing customer used.

If a renewed customer signs up through an insurance company’s call center or website, their premium will likely still cost more than the same policy sold through the comparison site. Companies are allowed to offer different prices to customers based on the many comparison sites they use. This means that a consumer who purchased car insurance through Moneysupermarket three years ago can be charged more for renewal than a new customer who purchases the same policy on Confused.com. To ensure the renewal offer is fair, you should remember how you originally got the policy and check rates for new customers on the same channel.

who – which Date

The price adjustment applies only to new listings created on the same day the renewal listing is created. What’s new for many consumers is that rewards for new and existing customers can fluctuate based on the date and time of day they are looking for an offer. As a rule, premiums increase as the required start date for insurance approaches. Because insurance companies anticipate that those who fly on the seat of their pants may be more dangerous on the road.

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The time of day you use search engines can make a big difference to your auto insurance quotes. Photo: Stephanie Fry/Getty Images/iStockphoto

However, early risers may also miss it. A 2019 MoneySavingExpert survey found that customers who renewed as soon as possible, usually 30 days before their policy expired, paid an average of £388 more per year than those who waited a week. According to the website, 24 days before renewal is the best time to bargain and you can save close to 40%.

who – which time

The time you visit the search engines can make a three-digit price difference. Prices will go up and down based on the number and population of people bidding on that day. If a company hires a lot of new drivers, it can increase the price for other new drivers to deter them.

Evening searches tend to get more expensive deals than early morning searches, and night owls looking for deals in the early hours may end up with hundreds of pounds in their pockets as they could be considered insomniacs living in the wild and taking risks behind the wheel.


The FCA’s rules apply to likewise policies. Some loyal customers can accumulate unwanted add-ons over the years without realizing it, and these eventually show up in the renewal price. Check your current policy to see if you need perks like international travel, accident and equipment coverage before you compare online.

Miscellaneous tricks

The price of a premium often depends on seemingly random factors, and a few tweaks to an app can lower it. For example, younger drivers can sometimes benefit from adding an older driver to their policy. Insurance companies may be shocked by some job titles, but not other descriptions of the same role. One reader was cited more when choosing a dental surgeon from the dropdown list than referring to himself as a dentist, while painters seem to be considered less serious than artists.

Finally, make sure you are on the electoral roll. Insurance companies usually use this for identity verification, and if your absence makes this work difficult, they will charge you for it in the quote.