Martin Lewis offers advice about cancelling car insurance
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In his latest MoneySavingExpert Money Tips email, Martin Lewis urged drivers to check deals now ahead of a major new rule change introduced in months. From January 1 2022, the Financial Conduct Authority (FCA) will bring in new car insurance rules to end price walking.
This will stop insurers from gradually increasing prices for those loyal to providers and offering the cheapest rates to new customers.
However, he has warned the new rule could see an end to “cheap switchers’ deals” across the board.
He said it is likely firms won’t just cut renewals to match new customers’ prices.
Instead, all rates will change to a new middle price point to bring existing and new customers into line.
This means new customers will likely pay more for cover if they switch providers under the new rules.
Martin Lewis has even warned rates may change before the rule comes into effect in January as insurers make preparations.
He said: “Rates may change before January, so checking now, while they’re still cheap, is safest – you can switch even if not at renewal.
“While the new regime officially starts in January, as it’s a big job, insurers will likely start to shift pricing algorithms sooner.
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“So the clock is ticking and the cheapest prices may start to disappear within weeks or months.”
The FCA confirmed the new price walking ban back in May after the issues were addressed in a market study.
They said millions of home and motor insurance customers “lose out” if they renew repeatedly with their current providers.
The analysis found at least six million loyal policyholders would have saved £1.2billion if they had paid the average costs instead of inflated rates.
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