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the Financial Conduct Authority (FCA) today announced new measures which should encourage more people to switch insurance providers and shop around.

Three ways insurance renewals are set to change

When that time of year rolls around again and your insurance expires, far too many of us simply renew with our current provider. It might be the simplest thing to do, but you almost certainly won’t be getting the best deal.

So the Financial Conduct Authority (FCA) today announced new measures which should encourage more people to switch insurance providers and shop around.

So what’s changing?

Keep an eye on premium increases

What’s your insurance premium for this year? If you don’t know, nobody would blame you. After all, it was 12 months ago and it’s hard enough to remember how much you spent on groceries last week.

From April 2017, your insurer will remind you of last year’s premium at each renewal. This way you’ll be able to see if you’ll be paying more, which should be a nudge to look for a better deal.

A typical home insurance premium increases by £9 a year, according to MoneySuperMarket.com. So by simply renewing, Brits are wasting £37 million annually, when we could be saving £59 each. 

Encourage switching

Allowing a policy to auto-renew is all too easy - for example, according to MoneySuperMarket, a quarter of us simply renew our home and contents insurance every year.

Under the new rules, providers will include messages on renewal notices encouraging people to shop around and get the best deal - as well as the right cover - each year.

Four’s the limit

More than half of us (54%) chose our home and contents insurance provider because it was the cheapest at the time, based on a MoneySuperMarket study. But if premiums are increasing every time you renew, you’re probably no longer getting the best price.

If you have renewed four times in a row, then you will start to get extra messages encouraging you to switch.

Nick Hill, Money Expert at the Money Advice Service, said: “Many of us buy items and subscriptions such as insurances which automatically renew, often on a yearly basis. This can give peace of mind that you won’t have a gap in service. However, the danger is you are paying more than you have to. It’s good to see that providers will provide stronger reminders to shop around. So take advantage of these reminders and shop around. I would suggest using at least two comparison sites to compare the best options for you. Or if you struggling, try using a broker to do the leg work for you."

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