Recent figures indicate that some UK customers are overpaying a combined £1.2 billion on annual insurance premiums with approximately 6 million home and motor policyholders begin charged about £200 too much for their insurance. This is a loyalty penalty with low-income families and the elderly paying the highest margins. Are you paying too much for your insurance? Does it ever pay to stay loyal? Will the latest reforms help? In the current climate when every penny really does count, we need to make savings wherever we can!



Many loyal customers are just not getting a good enough deal for their insurance and as such, the market is just not working for consumers and this is fundamentally wrong. Customers who renew with the same company year after year are frequently being offered worst deals and higher premiums than new customers. Loyalty is not being acknowledged, never mind appreciated or rewarded so why do we accept these overinflated and unfair renewals?


Why we do not shop around enough for insurance?



It takes a lot of time and effort to research the different insurance policies on offer and even longer to go through terms and conditions related to each policy. However time you spend could end up being well worth it should a situation arise whereby you need to make a claim on the policy.


It’s also very difficult to compare on a like for like basis as you do need to check that everything you want to be covered for is included in the price. If it’s not then these will be extras that you will need to add to the quotation.


Doing research and organising an insurance policy is boring. It’s not like booking a holiday where you can look at lovely pictures and dream of sandy beaches, crystal blue seas and relaxing on a lounger with a glass or two of Sangria. Choosing an insurance policy is much more mundane. However we’re always keen to get a good deal or pick up a bargain holiday wise so why not with insurance?

Auto renewals

Some insurance policies auto renew when the term ends so always check this in T’s and C’s when you first take out the policy.

Mistaken loyalty

It’s easy to be complacent and be happy with a provider ‘because you’ve been with them for years’, ‘never had any issues’ and ‘always good service’ etc. etc. but if said provider is upping your premium every year with no apparent improvement to the offering then it’s time to look elsewhere. It’s your money, not theirs.


How can you get the best deal when taking out an insurance policy?


Do your research well

Take the time to weigh up the best policies for you on comparison sites. If you then wish to still stay with your current provider, then go back and try to barter with them to see if they will price match or at least get closer to other quotations you have received.

Check the small print

Always check the small print for details of exactly what you are covered for. Examine your insurance certificate carefully when received to check everything has been included.

Avoid misguided loyalty

The bottom line for the majority of companies is profit and profit alone. Yes there may be loyalty schemes and incentives on offer but if you examine them in detail then they often ultimately just benefit the company and the company alone. Existing customers almost always end up paying more than new ones so what’ the point in staying loyal to a particular brand if this is not recognised?



The interim report in October 2019 by the Financial Conduct Authority indicated that a number of proposals could be introduced in order to try to put a stop to the loyalty penalty. These would include banning or restricting practices such as raising prices for customers who repeatedly renew their policies, requiring firms to auto move customers on to cheaper deals, forcing insurers to publish information about price differentials and stopping moves, which discourage switching providers.

In January the CMA has produced its investigation into the loyalty penalty in response to a Super Complaint following concerns raised by Citizens Advice and has made a number of recommendations accordingly. Today the FCA has finally announced radical reforms which mean insurance companies cannot charge an existing customer more than a new one.

Whether they will work or not, is another question but more does need to be done to make the system fairer and to save customers money. As it currently stands, it certainly doesn’t pay to be loyal.

Do you shop around for insurance? What are your top tips for getting the best deal? Please let me know in the comments.


There’s nothing quite as boring

Than getting insurance quotes

For pets, homes or holidays

Or for cars or even boats.

There are just too many choices

Of what you can include

And if you miss something out

Then you could be really screwed.


Search engines are useful

As are comparison sites

But there’s still so much to check

If you want to get things right.

So dot the I’s and cross the T’s

Do everything to the letter

You want to make sure that you’re covered

Whatever the weather.


It might cost a little more

To find the right policy for you

And always shop around

When you’re ready to renew.

Don’t be caught out by the hooks

Which companies use to lure you in

Make sure the quotes which are not fair

Get filed accordingly in the bin.











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