Martin Lewis’ website issues car insurance warning ahead of Jan 1 rule change

Martin Lewis' website has urged car and home insurance customers to check if they secure a cheap deal now ahead of a huge rule change which is coming in on January 1.

The new measures will end the controversial “loyalty penalty” in a move that will save Brits an estimated £4.2billion over ten years, according to The Mirror.

The “loyalty penalty” is where long-standing customers find themselves paying more compared to those who regularly switch.

It sees new customers typically getting the cheapest deals as insurance firms use lower prices to attract more business.

However, the insurance shake-up – which was first announced back in May 2021 – will put an end to this and should, in effect, mean existing policy holders won’t be more than new customers.

But while the rule change is good news for loyal customers, experts have warned not everyone may end up paying less.

MoneySavingExpert founder Martin Lewis predicts the change could mean the end of cheap new switcher deals – and is urging insurance customers to check if they can lock into a deal now.

Writing on his MSE website, he said: “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.

“It was possible insurers would have already made price changes knowing this was coming.

“Yet I've heard many waited until December to see what their competitors do – a 'who jumps first' strategy – especially as we're near the year end, a time they really want to acquire new customers (prices already dipped in November).”

The money-saving expert added: “Unless you've done all the checks in recent months, TRY NOW to see if a cheaper switchers' deal is available before the new rules hit, in case prices rise after, as then if you get the policy you'll have locked in the price before the new rules hit.”

How you can lower your car or home insurance

Even if it's not near the time to renew your existing policy, you could still end up saving money by comparing prices on your car and home insurance now.

You can normally cancel your current policy – although you may be charged a one-off admin fee for doing this, and whether you'll get a refund on the remaining months left usually depends on if you've made a claim.

Check the wording of your policy carefully to check what you'd be owed back and what it costs to leave.

However, if you've found a super cheap deal elsewhere, and you'd still be better off by switching with the above taken into account, it could pay you to lock into a better deal now.

Use a comparison site to check prices elsewhere. Make sure you always compare prices on multiple sites, as some insurance firms won't be covered across all the major comparison websites.

Some of the most popular ones include, and

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