Insurers are ordered to tell customers when they hike premiums from next year - but here's what you can do to slash costs right now
- Insurers will have to tell customers their previous year's premium cost
- Consumers will also be given information about shopping around
- Here's 10 things you can do right now to cut your insurance costs
Insurance renewal notices sent out after April 2017 will have to include details of the previous year's premium price, the Financial Conduct Authority has confirmed.
Information encouraging customers to find the best price and to shop around for quotes will also need to be included.
The change comes after the watchdog said loyal customers are often paying far more than new customers for policies.
Rule change: From April 2017 insurers will have to tell you what you paid the previous year
Until now insurers did not have to tell customers how much they had paid the previous year.
This meant it was harder for consumers to compare the new price quoted with what they had paid the year before.
But you don't need to wait until April for the new rules to be implemented - there are many things you can do now to cut the price you're paying for your home, car, travel and pet insurance.
Here's our list of the top 10, if you have others please let us know in the comments section below.
The best prices are reserved for new customers so always shop around for a new quote
1. Never auto-renew
It's well known that loyalty doesn't pay when it comes to insurance and new customers are offered cheaper prices than existing ones.
When you buy a new insurance policy there will be a box somewhere on the documentation asking you if you'd like to auto-renew the policy after a year - don't tick it.
Insurers rely on customers forgetting to cancel their policy after a year so they can auto-renew them onto another annual contract which is likely to be more expensive.
However, if you're not going to auto-renew, make sure you set yourself a reminder before the policy runs out, so that you're not left for a spell without cover.
2. Shop around for the best price
Insurance is a competitive market so instead of accepting the quote given to you by an insurer, check to see if you can get it cheaper elsewhere.
If you under-insure your home and then need to claim, you'll get less money back than you paid for your belongings
Comparison sites are great for searching a wide range of prices quickly, however it's worth remembering that some insurers such as Direct Line and Aviva do not feature on comparison sites.
We have our own car insurance search - see if you can bag a cheaper deal.
3. Haggle for a better price
If an insurer wants to keep you as a customer it might be willing to drop the price offered, or to throw in other freebies instead.
If you're looking for a new policy, or yours is about to end, call your existing insurer and ask it how far it will drop the price, and what else it will give you.
It is worth shopping around and using your cheapest quote as a bargaining tool.
If you're not happy with what your current insurer offers, you're free to move to another.
4. Paying monthly will cost more
When you buy a car or home insurance policy you'll be given the option of paying for it in one lump sum, or paying in monthly installments.
While paying monthly might seem like a more affordable option if you've not got the money to pay for the whole lot in one go, it'll cost you more to do this.
This is because insurers will whack on an interest charge if you choose monthly payments which is typically around 20 per cent. This means if your annual premium is £1,000 you will be paying an extra £200 just for choosing to pay monthly.
Paying the lump sum on a credit card with a lower interest rate, ideally one which has a 0 per cent rate, will cut costs but this is only an option if you're able to pay it off during the 0 per cent period.
If you're charged an unfair admin fee by your insurer you can challenge it
5. Get extra cash back
When you're buying a new policy always check cashback sites such as Quidco and Top Cashback to see if you can shave off extra cash from your premium.
At the moment, for example, there's £60 cashback available if you buy a car insurance policy with Aviva through Quidco.
The cashback offers change on a regular basis, and you'll usually wait around three months for the money to be paid.
6. Never leave anything out
We're often contacted by readers who have tried to claim on an insurance policy and had their claim rejected because something was missed off the forms when they signed up.
This is especially important when it comes to travel insurance for those people with pre-existing conditions but whatever your circumstances, it's important to include all relevant details.
If you miss something off the policy which is related to the claim, you've had a heart attack while abroad and have had previous heart problems, for example, the policy may be invalidated and you could end up with a very expensive medical bill to pay.
If you leave something out of an insurance policy and then need to claim the policy may be invalidated
7. Beware of admin fees
Insurers love fees, be it for calling up to change your address, or telling them you've got a new job or changed cars.
The fee varies depending on the insurer and you will usually only be charged if the change you've made is affecting the policy, for example if you've moved from a low to a high crime area.
If you think the fee is too high, tell your insurer.
If it refuses to waive the fee then you can complain directly to it and then after eight weeks if it still won't back down you can escalate the complaint to the Financial Ombudsman Service.
If it thinks the fee is unfair it can tell the insurer to waive it.
However, don't put off alerting your insurer to a change in your circumstances just to avoid the fee. If you don't do it, you risk your policy becoming invalidated.
8. Don't pay more than you need to but make sure you're fully covered
Although you want to make sure you're fully covered, you don't want to pay more than you need to for insurance.
First work out what you need to cover, and then find a policy to match this. You don't need to pay out for a top-of-the-range travel policy with all the bells and whistles if you're only going away for a week to Devon camping, for example,
On the other hand the policy needs to have sufficient cover. With home insurance, for example, you need a policy that would cover you if you needed to rebuild your home and with contents it needs to be able to replace all of the things you own with brand new replacements.
Only pay for what you need - buying the most expensive policy could be a waste of money
9. Watch out for a high excess
When you buy a new insurance policy you can choose the excess you pay and the higher the excess the cheaper the policy will be.
But if you go for a higher excess make sure in the case of having to claim on the policy that you would be able to afford the excess.
10. Protect your no-claims bonus
A long no-claims bonus is a great way to cut the cost of your insurance and can apply to both car and home insurance policies.
However, the definition of a no-claims bonus can vary widely between insurers so check the small print carefully before you pay for a new policy.
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