New FCA Regulations to Save Car Owners Billions
Every year many consumers will see that staying loyal to their car insurance provider reflects an increase in their premium. However, new Financial Conduct Authority (FCA) regulations will ensure that car owners could save billions of pounds on their policies over the next ten years, meaning the monopoly is back in their hands.
Why these changes are good news for you
As your bank balance perhaps already shows, insurers have, for a long time, been increasing premiums for existing customers at renewal.
This poor practice is known as ‘price walking’. But after a 2018 FCA study showed that new customers are often offered cut-price premiums, people have campaigned for regulation reforms. Finally, they are set to get their way, ensuring all home and car insurance customers are treated with the same respect.
Christopher Woolard, interim chief executive of the FCA, said: “We are consulting on a radical package that would ensure firms cannot charge renewing customers more than new customers in future, and put an end to the very high prices paid by some long-standing customers.”
How does this impact my finances?
New customers for buildings and contents insurance have typically paid £108 less for a year’s cover, costing them £130. However, if they had stayed with the same company for five years it would have cost them £238, according to the FCA.
Customers that have switched their car insurance, rather than showing unreciprocated loyalty, have saved an average of £71 per year.
Over the next decade, home insurance savings could be worth over £1,000 to customers. Whilst car insurance savings could be valued at more than £700 during that ten-year duration.
Millions of policyholders had paid an astonishing £1.2 billion more than they needed to for their insurance simply by renewing their existing cover.
Regulation reshuffles should save consumers a whopping £4.2 billion combined, during this period.
Whilst there is no guarantee that premiums won’t increase for other reasons, at the very least you can be rest assured that you are no longer the victim of ‘price walking’ and misplaced loyalty. Meaning you will be treated equally whether you are a new or returning customer.
Don’t count your savings just yet
These savings will come to fruition no later than January 1, 2022. So, you might have to hold your steering wheel a little longer before seeing your savings trickle into your bank account.
Will the new FCA regulations be enforced?
You can rest easy knowing FCA regulations are a set of rules and controls that ensure financial businesses work fair and effectively, meaning you can trust the FCA to ensure that the dreaded ‘price walking’ is kicked to the curb.
Insurance providers will also have to report data to the FCA. So, the regulatory body can ensure that customers are getting what they have paid for.
In fact, FCA regulations already offer you financial protection and savings, with just shy of 60,000 FCA regulated firms in the UK, such as the following:
- General insurers and any intermediaries (for example, brokers)
- Banks, building societies, and credit unions
- Credit providers
- Financial advisors and investment managers
Why you should still shop around
Instead of clock-watching and waiting for 2022, you can make big savings today by using comparison websites to compare your car and home insurance.
Once the new regulations are in place you will still want to keep your eyes peeled on comparison websites. Although equality will now be in place across new and existing policies, comparison websites will still be able to get you the best price for your policy. Here at mustard.co.uk, we help you compare car insurance prices from up to 75 brokers in minutes.
Premiums will still in fact change year to year. However, the new FCA regulations will give you the fairest chance of finding the right policy for you. We will be able to bring those prices to you, meaning you just need to decide what to use your insurance savings on.
Insurance comparison you can rely on
mustard.co.uk is an insurance comparison site that is 100% independent. The quotes we show you are completely impartial and of course we are authorised and regulated by the FCA, under Firm Reference Number 566973.
And remember with mustard.co.uk, if you find a cheaper quote anywhere else online, we guarantee to beat it!*
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