Insurers are to be forced to
provide clearer renewal quotes, which as I’m going to explain here on the Kiran
Trivedi blog, is great for your personal finances.
They Won’t Tell You What You Used to Pay
We’ve all been there. A new
premium for your home, your car, hell, even your dog, comes through and it’s
gone up. You don’t know why. You think it’s gone up, but you’re not sure; the
insurer won’t tell you what you’ve previously been charged.
It’s a common problem, and it can
wreak havoc on your personal finances. If you can’t compare your old premium to
the price of your new one, it’s far harder to craft an accurate budget that you
can use to balance your personal finances in the long term.
Call for Easy Comparison Renewal Quotes
Well that could be set to change,
as last week city regulator Association of British Insurers (ABI), itself wrote
to the Financial Conduct Authority (FCA), proposing that insurers be required
to remind customers what they previously paid when they inform them of a new
premium.
However the ABI went on to
suggest that the change should only apply to homes and motors, which represent
a majority share of the market, and not, at last initially, to other types of
insurance i.e. pets, foreign travel, commercial purposes etc.
Come Clean About Introductory Discounts
The ABI also suggest that
insurers be forced to come clean about introductory discounts on premiums,
which are often offered in the first year, to provide customers with an
incentive to switch insurers.
The BBC reported that ABI’s
deputy director general, Huw Evans, spoke out on the proposals, saying: "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."
Many Customers Have Been Paying Over the Odds
The fact that even insurers are
backing the proposals means that you can be sure that when they come into
effect, which is expected to be the end of next year –they’ll act to benefit
you, the customer.
This viewpoint was mirrored by
Natasha Glasgow, head of insurance MoneySuperMarket, one of the consumer groups
which lobbied for the changes. According to the BBC, Glasgow said: "At long last, the
insurance industry is waking up to the fact that it has made the process of
renewing policies at a competitive price as difficult as possible, with many
customers paying way over the odds,"
I couldn’t have put it better myself. This move is great for your
personal finances because it will ensure that you don’t draw money from the
budget to overpay when you are presented with a new premium!
