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Savvy drivers and homeowners who switch their insurance provider every year may be facing a steep rise in the premiums on offer from next year.
The financial watchdog is proposing to ban what has become known as the ‘loyalty penalty’ from late 2021, potentially saving some 6 million customers £3.7billion over 10 years.
Currently in the motor insurance market premiums rise by an average of 2.54 per cent at renewal, according to Consumer Intelligence. In home insurance, premiums go up by an average 12.67 per cent every year.
Banning this will mean that insurers can no longer reserve the best deals for new customers while at the same time charging more to existing policyholders who don’t switch away when they