When you receive your car insurance renewal notice it will usually tell you a number of things one of which is what your premium will be for the next 12 months. What it does not always tell you is how much you have been paying over the last year and this would be useful information to have in front of you so that you can easily see if there has been any change in how much your motor insurance cover is going to cost you.
Well, that is going to change with effect from the 1st April 2017 following the Financial Conduct Authority (FCA) going through a consultation process with various parties. The FCA has recently released a Policy Statement “Increasing transparency and engagement at renewal in general insurance markets-feedback on CP15/41 and final rules and guidance”.
It relates to certain types of insurance renewals including car insurance policies that have a minimum term of 10 months that are carried out with the same insurance company but does not include group policies.
The insurance company has to provide certain information to the customer within a reasonable period of time before the policy is due to be renewed. This information includes how much the premium is going to be at renewal, how much the premium was when the policy was taken out unless any amendments were made to the policy in which case the premium quoted must be the one applicable to the most recent amendment to the policy, a statement must be provided to the customer requesting that he or she checks that the level of cover being offered when the policy is due for renewal is suitable and that an option open to the customer is to compare quotes and cover with other insurers. The insurance company must also point out to the customer who is being asked to renew with the same insurer for the 4th or subsequent time that, if he or she shops around, they may be able to obtain the required cover for a lower premium.
We are sure that you will agree that this is a positive step forward that can only benefit the customer who will more easily be able to compare what they have been paying with how much they are being asked to pay for the cover and make a decision as to what they wish to do when their existing car insurance comes up for renewal.