Financial guru and consumer champion Martin Lewis has a warning to drivers ahead of law changes set to take place in the UK.
From January next year, home and car insurance providers will be banned from charging a 'loyalty premium', meaning they won't be able to charge customers who renew every year.
Martin shared the update on last week's Martin Lewis Money Show on ITV where he offers money saving advice.
While this is good news, Martin warned drivers that customers are likely to see less competition in the market, The Mirror reports.
And if we've learnt anything from the energy crisis, it could mean that the amount of money saving deals available for car and home insurance could drop significantly.
Speaking on his Money Saving Show, the consumer champion said: “There’s a big rule change coming on January 1."
“Car, motorbike, van, and home insurance are all affected.
“This is the end of the loyalty premium and the end of price walking.
“That means if you automatically renew your policy, your insurer will no longer be able to push up the price year after year.”
Lewis continued that it’s likely existing customer prices and new customer prices will meet in the middle - leading to a chance of there being less competition.
“In other words, the savings are going to drop dramatically for people that compare and save each year,” he explained.
The changes kick in in January but Lewis warned that any insurers will start to update their prices to the law change in the next month.
“That means the window of opportunity to bag a cheap deal is now.”
Issuing advice to viewers, he said it’s worth checking to see whether you’re able to save - even if your renewal is six months away.
“If you do find you can save substantially, start a new policy, cancel the old policy, and ask for a refund on the outstanding time period.
“Providing you have not claimed, you should get a pro-rata refund minus around £50 in admin fees.”
If you’re near renewal, he said the perfect time to get good quotes is 23 days before your car insurance policy expires, or 21 days for home insurance.
“The reason for this is that if you leave it until later, insurers categorise you as a higher risk person and charge you more.”
Lastly, he shared some advice for those shopping around.
“Two different comparison websites could have different prices for different insurers, so use two or more.
“Some insurers like Direct Line are also not on comparison websites, so check these individually.”
He added: “If you want to stick to your provider, find the cheapest deal and contact them to match it or haggle lower.”
Those on the hunt for a lower deal may be able to save more through a cashback website such as TopCashback or Quidco.
Some pay up to £70 when you join through them.
He concluded: “Lastly, insurance policies are like loans, so pay upfront and you’ll pay the least.”
New ‘price walking’ rules from January 2022
Many firms increase prices for existing customers at renewal in a practice known as price walking.
They use sophisticated processes to target the best deals at customers who they think will not switch in the future and will therefore pay more in the long run.
It’s part of the reason why people are encouraged to shop around and switch every year.
At the same time, these companies are offering below-cost prices to new customers to lure them in.
