Martin Lewis has warned that people should “never” automatically renew their insurance, with inflation set to explode prices widely.
Speaking on the Martin Lewis Money Show this evening, the money advice guru told Britons that insurance prices are rising in the UK despite recent moves by financial regulators.
He explained that in the months following the Financial Conduct Authority’s decision to ban practices that cost loyalty customers plans, another variable took its place.
The expert said the country has now entered a “massive insurance inflationary period”, with prices now pushing higher on the platforms established in 2022.
Given the hostile environment, while the British may have felt reassured that they could stay on the same plan without fear of a price hike, they should start shopping around for potential new suppliers.
During his keynote meeting tonight, Mr. Lewis warned that the reason for increases in insurance prices on insurance plans has changed recently.
Before 2022, he said price increases for loyal customers were the result of “price walking”, where companies would gradually “increase the price” each year.
In January 2022, the FCA banned price gouging and loyalty penalties, a move Mr Lewis said was “intended to make everything simpler”.
But prices have risen regardless, with inflation raising the cost of car insurance by more than 60 percent and home insurance not far behind.
He urged people not to assume that home and car insurance renewal prices are the cheapest and to pay attention to how the FCA’s new rules work.
Mr Lewis said: “Don’t assume your renewal price is the cheapest you can get for home and car insurance.
“The worst thing you can do is do nothing. Never auto-renew without checking elsewhere.”
He added: “What you need to do is watch out for some giant baboons, because you know what baboons were? Big Buts.”
Mr Lewis explained that the new rules in question are “channel specific”, meaning that new customers cannot get cheaper prices than those on long-term plans if they go through the same process.
He added that prices can vary greatly according to firm and desired customers, which means people need to “investigate the market” if they want a cheaper price.
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