FCA shines a spotlight on Price Walking
Pricing rules for home and motor insurance changed from 1 January – what does it mean for you?
From 1 January 2022, the Financial Conduct Authority (FCA) has introduced new pricing rules affecting home and motor insurance. Quite simply, these rules mean there can no longer be discounts given to new clients that are not shared with existing clients, or price increase for renewing clients, a practice known as price walking.
When existing home and private motor insurance clients renew their programme with their current provider, the price charged cannot be more expensive than the price to a new client for the equivalent policy. This rule change levels the playing field when it comes to price and is designed to ensure that policyholders are treated fairly and can find the right insurance solution from a competitive market.
Looking beyond cost is vital, and it’s important to understand the risks you are exposed to and have an insurance programme in place to protect your home, your car and your lifestyle. The pricing rule doesn’t mean you shouldn’t shop around when it comes to renewing. Instead, you should consider more closely the renewal process itself.
When it comes to home insurance, it’s likely that there have been changes that could affect your cover. Possessions that have increased in value or new items of jewellery for example need to be considered as well as the more obvious changes such as extensions to the building itself.
Receiving a renewal reminder asking for the next year’s premium without asking any questions about changes in your circumstances isn’t good enough. Speak with your adviser to get the right advice for you today.
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