Classic car owners may be interested to read about a change that came into effect on the 1st January 2022 relating to how insurers treat both new and existing customers in respect of their car insurance premiums. The change has come about presumably due to existing customers feeling that they have been unfairly treated financially by their insurer when it comes to renewing their cover.
From the above date, insurance companies have to offer the same premium for cover on a like for like basis to both an existing customer and a new customer. In the past this has not been the case.
Previously, insurance companies have often offered new customers a cheaper premium to encourage them to take out a car insurance policy with them. Potentially, when the policy then comes up for renewal in a year’s time, it may be that the premium will increase. This encouraged many motorists to shop around for cover on an annual basis to see if they can get the cover for a similar or lower price with another insurer.
Now, insurance companies are not allowed to differentiate between new and existing customers when it comes to price on a like for like basis. Therefore, an existing customer should be offered a premium at renewal that is the same as if they were applying as a new customer.
Presumably, this will upset many customers who have gone to the trouble of shopping around for cheaper cover. However, there is nothing to stop people still shopping around as they may be able to get the cover cheaper than what they have been paying for the last year with another insurer or if they are taking out cover for the first time they may be able to get like for like cover cheaper by seeing what different providers charge.
Those of you who own a classic car may be interested to read that the same new rule applies to classic car insurance providers.