Martin Lewis issues warning to every household and motorist across the UK over new insurance rules – Daily Record

Martin Lewis is warning of a “monumental shake-up” across the insurance sector next year which will affect every household and motorist across the UK.

Explaining the change in the latest newsletter, the consumer champion wrote: “On 1 January 2022, regulator the Financial Conduct Authority brings in new insurance rules. They primarily apply to vehicle insurance (car, motorbike, van) and home insurance (buildings and contents), but it’s a monumental shake-up – the biggest I remember.”

The financial guru said the reason for the change is to end price walking – where customers who renew their insurance policy every year are penalised by seeing their prices put up while new customers get the best deals.

Martin Lewis explains the changes coming to home and car insurance next year
Martin Lewis explains the changes coming to home and car insurance next year
(Image: ITV)

To help everyone understand the changes, the founder of has created a list of 12 need-to-knows and what you should do about the new rules – below are the key points.

Car and home insurance changes from January 1, 2022

Martin explained: “The loyalty premium has long been a bone of contention. It’s great news for those who don’t switch, or do but don’t want the hassle. The rules say insurers must prove, on aggregate, that they charge new and existing customers the same, including any vouchers or cashback.”

Martin’s prediction on price matching for all customers

While the money-expert has no guarantee of how firms will tackle the rule change his guess is that they won’t just cut renewals to match newbies’ prices.

He said: “They’ll drop ’em somewhat, and increase new-customer rates – meeting towards the middle.

“Don’t think savings by switching will end totally though. Different insurers will still have different prices – and new entrants will try to disrupt the market – but savings will likely be smaller.”

Insurance rates may change before January

Martin’s prediction here is that as implementing the rule change is such a big job, many insurers “will likely start to shift pricing algorithms sooner” which means cheap deals that around just now may disappear “within weeks or months”.

Use more than one comparison to find best deal

“Comparison sites are actually technically insurance marketplaces, as insurers are allowed to, and sometimes do, offer cheaper prices on individual sites than they charge direct,” writes Martin.

He advises using at least two different comparison websites to find the best deal.

Get quotes 23 days before policy is due for renewal

This is something the 49-year-old has pushed before as the timing of your renewal could make a huge difference to your bank balance.

He said: “We analysed over 70 million quotes, and found the optimum time to get new car insurance quotes is 23 days ahead of renewal (21 days for home), but anytime around three weeks is good.

“Leave it later and car insurance prices can almost double because insurers’ algorithms show those who get new quotes earlier are a lower risk (the rise is far less steep with home insurance).”

To read all 12 car and home insurance need-to-knows, visit the MoneySavingExpert website here.

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