Martin Lewis, founder of the popular consumer finance website MoneySavingExpert, has issued a warning about the strategies car insurance companies might be employing to charge existing customers higher rates.
Despite regulatory efforts by the Financial Conduct Authority (FCA) to eliminate price discrimination against renewing customers, Lewis claimed in a recent newsletter that insurers may still be circumventing these rules.
Historically, car insurance providers could increase premiums for their existing customers each year. This practice was prohibited by the FCA in 2022 as part of a move to introduce more fairness into the insurance market.
But despite the FCA’s efforts, Lewis said there are still ways for insurers to impose higher charges on long-standing customers.
Throughout his newsletter, Lewis urged motorists to “never just auto-renew” as he enumerated the ways in which insurance firms appear to navigate around FCA rules.
He said one method used by insurers involves increasing premiums for all customers, thereby reducing the availability of competitive offers for new clients.
Insurers also leverage their ownership of multiple brands, he added, potentially leading to higher costs for consumers who auto-renew their policies.
“Of course, of the millions of readers of this email, some will find their renewal is cheapest,” Lewis wrote in the newsletter. “If so, fab. The key is to never assume your renewal is the winner without checking.”
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