When it comes to renewing your car or home insurance knowledge really is power. After all, how can you compare costs if you can’t remember how much you paid last year? And that’s exactly why we welcome moves by the Association of British Insurers (ABI) to make the renewal process more transparent.
The ABI has written to the Financial Conduct Authority (FCA) and made the following proposals:
The proposals are designed to make it easier to compare insurance renewal costs and to encourage customers to shop around for better deals. They are both smart ideas and long-overdue in our eyes. As an independent broker we work hard to find the deal that’s right for you not for us; and we are happy to see changes that will make the process more transparent.
Of course there are plenty of reasons why premiums change over the year. For example: home insurance premiums can ‘go down’ if you improve your household security or ‘go up’ if there’s been a spate of burglaries in your neighbourhood. Similarly car insurance premiums can ‘go down’ if you have a claim free year or ‘go up’ if whiplash fraudsters are active in the area.
The ABI surveyed 2000 people and found that nine out of ten thought the changes were a good idea. Huw Evans of ABI commented “Insurers want to make renewing your insurance policy easier, and clearer to understand, by reminding you of last year's premium and flagging-up introductory discounts.”
In response the FCA said “We welcome the ABI’s contribution to the debate on helping consumers make better decisions at renewal time”. If everything goes according to plan the ABI hopes to have the measures in place by December 2015.
The proposals follow similar calls made by consumer champions Which? earlier in the year. Richard Lloyd of Which? commented “These simple changes could save people money by prompting them to shop around or haggle for a discount, and we urge the Financial Conduct Authority to adopt the proposals. The proposed reforms would be a victory for the 30,000 people who signed our campaign calling on insurers to show customers the premium they paid last year.”