MSE News: Car and home insurers to be banned from charging existing customers more than newbies

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Car and home insurers are to be banned from charging existing customers more at renewal than they would expect to pay if they were taking out a new policy with the same firm, as part of a ‘loyalty penalty’ crackdown...

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'Car and home insurers to be banned from charging existing customers more than newbies in loyalty penalty crackdown'

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roddydogs

Ill believe that when I see it.

blueste

roddydogs said:

Ill believe that when I see it.

As in it being brought in or as in insurers abiding by the new legislation? I do wonder if this is going to result in higher prices for those of us that always shop around and switch?

[Deleted User]

It'll mean higher prices for new customers and no first year discounts.

It's similar to credit card fees, where it was felt unfair that only customers using credit cards should pay the fees. Now everyone can enjoy paying the fees, without the hassle of using a credit card. 

Sandtree

blueste said:
I do wonder if this is going to result in higher prices for those of us that always shop around and switch?

The regulator has predicted it is likely that it will but that on balance its better to do that and protect vulnerable customers from funding those lower prices.

Granpan

Many times i have read complaints about this,insurance companies take advantage of folk they carry on year after year.
About time the FCA got involved .

Mickey666

Sandtree said:

blueste said:
I do wonder if this is going to result in higher prices for those of us that always shop around and switch?

The regulator has predicted it is likely that it will but that on balance its better to do that and protect vulnerable customers from funding those lower prices.

Yes, that's exactly what will happen and it's not difficult to understand why.
It's more nanny-state stuff really.  Give companies and people the freedom to choose various things, a  minority of people lose out because they don't pay attention, then complain the world is against them, so nanny the regulator steps in to put a metaphorical plaster on their hurt feelings and say 'there, there, don't you fret, nanny will sort out the big bad companies' . . . with the inevitable result that most people will end up paying more for their insurance.  Nice.

It's a bit like that ridiculous EU (was it?) ruling about young persons car insurance being discriminatory because it was so much cheaper for girls than boys.  Hmm, so nothing to do with the different accident rates at all then?!  So of course when they rule that prices must be the same for both genders, what is the obvious thing that will happen?

isasmurf

I wish people would stop calling it a loyalty penalty. Its not. Its an apathy penalty. Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? Apart from a small number of people who for health reasons don't have the capability to look after their finances and need protecting, the correct policy response for everyone else is education, not regulation. 

Thrugelmir

isasmurf said:

Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 

Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 

briskbeats

Insurance companies take advantage of those who don’t shop about for deals (mainly the elderly).

Having owned a car for almost 20 years. I have only used 6 different insurers in this time. One time I stayed with the same insurer for two years as I bartered the new customer quote and the free Karcher washer. Got that £25 gift card.

Im surprised that the FSA have not commented on the high APR some insurers charge. Can people pay for their insurance on a credit card?

I pay my car insurance in a single payment as fortunately it’s due in March and use the council tax ‘free months’ of payment to pay

Sandtree

Thrugelmir said:

isasmurf said:

Why should people who actively look after their finances be penalised, and people who can't be bothered be rewarded? 

Why should customers have to check that their provider isn't overcharging them on renewal?  When you go into a pub and run a tab. You don't expect the price of the drinks to rise when you buy another round of the same drinks. 

Never heard of happy hour? You join with a low price and then after a time the cost goes up