Financial guru Martin Lewis has issued a word of warning to drivers and homeowners as 2021 comes to an end.
The consumer champion has warned that a possible 'spike' across insurance prices will hit bill payers and will affect every motorist and home owner.
He notified his followers in the Money Saving Expert newsletter and explained what will be happening with insurance prices in 2022.
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Martin wrote: "On 1 January, as Big Ben strikes midnight and 2022 is birthed, and while the champagne corks and party poppers pop, we will enter a brave new insurance world.
"This is the day the regulator, the Financial Conduct Authority, brings in new, hopefully better rules to turn the mainstream insurance market on its head. However, in the short run this change could see a spike in prices for switchers, so this is my last chance clarion call to get quotes now, just in case."
A new rule is set to come into force on 2022 which will mean new and existing customers will pay the same for insurance. This will stop people who renew their insurance witnessing new customers get a better a deal where their price may increase.
Martin wrote: "The rules aim to end the loyalty premium, where those who renew each year pay more than new customers who switch as they're offered cheap prices to do so.
"From 2022, insurers must prove, on aggregate, they charge new and existing customers getting insurance via the same 'channel' the same price, including vouchers or cashback. All good for those who don't switch, or do, but don't want the hassle.
"PS: The 'channel' bit means, for example, it can still charge different prices on different comparison sites, provided existing customers who originally came via that site are charged the same."
Martin added: "My best guess is firms won't just cut renewal prices to match those for newbies - rates will meet nearer the middle (as happened in 2012, when insurers were barred from gender price discrimination). This will mean savings from switching will likely relatively reduce."
Although it is unclear how it will exactly effect switching offers, the consumer champion suspects switching deals will be lower. So Martin is urging everyone to check their policy and use comparison sites to lock in the best deal now-before it's too late.
He recommends switching 23 days before renewal, calling it the 'sweet spot' where customers will find the cheapest deal.
Even if you are not near your renewal date, Martin encourages drivers to check anyway.
He explained: "Find a cheaper policy and you can usually cancel your existing one, and as long as you've not claimed / reported an incident this insurance year, you should get a pro-rata refund for the remaining time minus a £50ish one-off admin fee (do double-check)."
Martin Lewis insurance top tips
Martin went on to share eight steps to find the cheapest insurance.
1. Check at least two insurance comparison sites
2. Compare that to Direct Line and other deals comparisons
3. More than one car in the household? See if a multi-car policy is cheaper - you can't do this via comparison sites
4. Three counter-intuitive checks to make:
- If price is key, check if comprehensive is cheaper than third party
- See if adding a responsible extra driver cuts costs
- Use the Job Picker to see if tweaking job description cuts costs
5. Check if you can get cashback
6. Want to stay where you are? Haggle with your provider
7. Struggling to find affordable cover? Try using a broker
8. Always check the policy is right for you - complain if a claim is unfairly rejected and try to read at least the policy summary before signing up
