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Martin Lewis, the renowned Money Saving Expert, has offered crucial advice to individuals seeking new car insurance deals, particularly as recent research indicates a significant rise in premiums by £279 over the past 12 months.
According to Lewis, insurance companies are legally obligated to provide existing customers with the same rates offered to new customers. He emphasized, “If you buy a policy, they are legally obliged to reduce it to the price they were offering to new customers because of the law that says existing customers cannot be charged more than new customers.”
However, Lewis pointed out the specificity of the new law against the loyalty penalty, which prevents existing customers from paying more than new customers in car and home insurance. He clarified, “The law says, as an existing customer, you should not be charged more than a new customer who went through the same channel as you.”
Speaking at the Ideal Home Show at Olympia London, Lewis highlighted the necessity for consumers to understand the intricacies of the law, particularly regarding the channels through which they purchase insurance.
These remarks coincide with recent findings from Compare the Market, which revealed a notable increase in typical premiums by £279 in the past year. This surge in insurance costs may partly be attributed to a rise in the cost of claims for insurers.
Notably, young drivers under the age of 25 have experienced the most significant annual increase in car insurance costs. The typical premium for motorists in this demographic has surged by £648 year-on-year, reaching £2,057 in February 2024.
Julie Daniels, a motor insurance expert at Compare the Market, emphasized the importance of shopping around for the best deals, particularly for motorists who tend to stick with their existing insurer each year. She recommended comparing prices to find the most suitable and cost-effective insurance options.
With the cost of car insurance on the rise, Lewis’s advice underscores the importance of consumer awareness and proactive measures to secure the best insurance deals available.
