Are loyal customers getting the best insurance deal now?
New legislation came into force in January 2022 preventing insurance providers from discounting insurance quotations to attract new car and home insurance customers. The reason for this intervention was to protect those loyal customers that did not actively switch. It is was thought that loyal customers subsidised lower rates offered to attract new policy holders, although it could be argued that the insurance company was relying on retaining the policy holder for a number of years.
What has been the effect on insurance costs so far? Consumer Intelligence reported that 50% of consumers are now seeing either a decrease or no change at renewal. This means that another 50% are seeing an increase! Insurance premiums are starting to rise across the board, driven partly by inflation and secondly by higher replacement costs for parts due to the supply shortage.
The new legislation is clearly having a positive impact for loyal customers but our conclusion is, it is still important to compare prices to determine whether or not you should switch insurance provider!
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