Loyalty penalties to be banned.Car & Home insurance.
 

Loyalty penalty ban to save insurance customers £4.2bn.

From next January, car and home insurance renewal quotes may not be any more expensive than those offered to new customers.

https://www.fca.org.uk/news/press-re...urance-markets

After renegotiating the quotes given on both policies down to new customer levels our Car and Home insurance company (Saga) gave us a 3 year fixed price Insurance premium on both the policies last year.

Slightly dearer than some other company's quotes last year but this year what we have paid is very competitive with other quotes I found on comparison sites. .

It will be interesting to see how the new legislation works and how it effects costing for both customers and insurers.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

Good news for insurance purchasers. Let's hope if this is successful that the same principle is applied to other service providers like gas, electricity and broadband.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

I have to admit I would also love to hear that other service providers, including VM, would be subject to the same rules sometime in the future. I hate having to phone up to renegotiate my discounts every year.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

surely, what these means is, that they'll just not apply a new business discount, so what that means, is that I'll save 5 mins every year by not going to a comparison site, but won't get the benefit of changing to a cheaper tarif by being a new customer elsewhere, and they won't bother offering loyalty discounts, why would they, they don't now, as they know most ppl are too lazy to change, so only the insurance co benefits

Re: Loyalty penalties to be banned.Car & Home insurance.
 

How is this going to save customers anything ?

All that will happen is they no longer discount new customers, so everyone will pay the higher prices. Great for the complanies, not for the customers.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

I had assumed that there would still price comparison sites and that companies would still need to compete for customers?

Surely that competition will temper price hikes. Or am I being very naive?

Re: Loyalty penalties to be banned.Car & Home insurance.
 

By their very nature, price comparison sites only display first year premiums. In fact the growth of price comparison sites is probably the reason this problem has come to exist. Insurers are heavily discounting the first year in the hope that people won't switch every year.

As the price comparison sites will continue to exist, there is limited scope for wholesale price hiking in the industry. All it takes is for one disruptive competitor to keep their prices lower, and they scoop up the business at everyone else's expense.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

That's what I assumed. I guess we shall have to wait and see.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

Saga said they could beat any other company, then slapped a £50 "arrangement fee" onto the total. That made them £42 more expensive than their nearest rival like-for-like. So I changed company.

I think these "arrangement fees" might appear more often, as they are not ACTUALLY part of the premium.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

This is terrible news for those clever enough to search for better deals and rewards the stupid who are unable to get their heads round searching for better deals.

All those who search will be paying more from now on

Re: Loyalty penalties to be banned.Car & Home insurance.
 

Whilst I agree with the premise of what you say and I shall be amongst those that will lose out, the idea that it has anything to do with being 'clever' or 'stupid' is
as arrogant as it is ignorant.

Re: Loyalty penalties to be banned.Car & Home insurance.
 

The number of people over the years I have tried to encourage to check for better deals but can not be bothered to put the effort in led me to my opinion

Re: Loyalty penalties to be banned.Car & Home insurance.
 

Inertia isn't the only reason why some people don't shop around though.

Some people are not computer savvy, are neuro diverse, elderly etc. There was a piece on this earlier where it showed a retired senior accountant who had been overpaying for years by about £800 per annum. He wasn't stupid, he just didn't know how to use a computer, was 84 and suffering from dementia.