New policy rules benefit consumers, but beware price mismatch
New rules regarding the information insurers must provide at policy renewal time should be of significant benefit to consumers, latest research from the insurer Policy Expert shows.
The changes, which came into effect this April, mean that when insurance policies come up for renewal customers have to be given the previous year’s premium, and not just a new quote. Insurers also have to actively encourage those who have renewed for a number of years in a row to check the cost of their cover.
Many still lack the right information
The new legislation coincides with figures released by Policy Expert which show that when it comes to vital insurance, such as for the home or car, many people still fail to shop around, and also overestimate what they should be paying.So the new regulations could potentially help many consumers make some big savings.
Consumers still aren’t shopping around enough
Policy Expert’s research shows that almost a third of consumers (30%) have only changed insurance providers once in the last four years, while a similar number (29%) have switched twice over the same period.
Nearly one-in-five (17%) are much more financially savvy, having changed providers every year in three of the last four.
Sadly, a large minority, just over one-in-ten (11%), are missing out on potentially major savings by not having switched at all.
Consumer price expectation mismatch
However, while the new rules could help UK insurance-buyers make better decisions and save money, consumers could still end up accepting higher policy quotes than necessary. That’s because the majority told Policy Expert that they think insurance cover costs, on average, more than it actually does.
Take contents insurance, for example. The Association of British Insurers gives an average cost of £170 for a 12 month policy, but consumers think that they would have to pay £280, or £110 more (67%), on average, for the same cover.
If this were applied to more expensive cover, for a home with more valuable contents, for example, which cost £500 annually, that equates to around £340 more. Most consumers would be very disappointed to pay £340 more than necessary!
Using information wisely
Policy Expert, along with most other insurers and insurance brokers, back the improved renewal transparency rules wholeheartedly. And if consumers use the new information they receive to find better value policies, the savings they make could give their finances a major boost.
As an online insurer and broker, Policy Expert help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email, twitter and instant chat. For more information, you can call our experts on 0330 0600 600 or visit www.policyexpert.co.uk/contact for more ways to reach us.
Published 19 April 2017