New insurance rules on premiums – how will it affect you?

Anyone renewing their home or motor insurance policy will now pay no more than they would as a new customer

07 January 2022 - Tim Mulley

Insurance premiums are the amount you pay an insurer, usually on an annual basis, for insurance cover on things like your house, possessions, car and so on. The amount you pay reflects what the insurer believes is the likelihood you will make a claim, based on factors such as your age, health, type of employment and where you live.

Many people simply renew their insurance policies each year, without checking if they could find a better deal – or using a broker to do this for them. However, the Financial Conduct Authority (FCA) has said this has meant that in some of these cases, insurers have ‘walked up’ premiums to these loyal customers by charging them more every year, even though their risk is no greater. Or, put simply, insurance customers who shopped around and switched provider each year were often more likely to get a better deal than people who remained with the same insurer.

What has changed?

The new rules from the FCA mean that from 1 January 2022, premiums charged by an insurance provider to all home and private motor insurance customers renewing their policy cannot be higher than the price they would charge to an equivalent new customer for a corresponding policy.

These changes are intended to remove excessive price discrepancies in the premiums paid by some new and existing customers for the same policy. The rules apply across home and motor insurance markets, whether the cover is bought from an insurer, insurance broker, price comparison website or a retailer on the high street.

Who will benefit?

The FCA has acknowledged that these new rules may lead to some consumers paying higher prices if they currently benefit from discounts by shopping around for the lowest premium. Conversely, insurance clients who choose to remain with their preferred insurer will not be charged any extra for doing so.

A question of balance

April Rand, Insurance Account Executive at Scrutton Bland Insurance Brokers Limited commented: “We believe that the home and motor insurance markets will remain competitive as premiums are calculated independently by insurers, using a wide range of relevant considerations. For example, in calculating your car insurance premium, an insurer will look at your age, the vehicle you drive, your driving record and any claims history you have had.”

April continues: “Whilst price is a major consideration in deciding which insurer to use, there are several other factors to bear in mind, and where using a broker may be useful:

Select the policy which meets your needs. It is crucial that you buy the policy that most closely meets your individual needs, and not automatically go for the cheapest cover.

Make sure you check the renewal terms if you want to renew with your current insurer. Read your renewal documents carefully to make sure you are aware of any changes to the price, scope of cover, any new conditions, and whether there are any changes in your circumstances that you need to tell your insurer about. Speak to your broker if you are unsure.

It could still pay to shop around. The insurance market will continue to be competitive, with a wide range of policies available from a range of providers. An independent insurance broker, such as Scrutton Bland, will look at the whole of the market, and they are often aware of deals that aren’t widely publicised. They will also be there to assist you in the event of a claim, reducing your stress at what may be a difficult time.”

If your insurance policy is due for renewal and you’d like to get in touch with a member of our insurance team to help you find a competitive quote, please call 0330 058 6559 or email


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