Blame it on what you like, loyal customers are still getting a raw deal

My home insurance policy was up for renewal the other week. I had the quote through a couple of weeks earlier. Despite no claims or changes to my circumstances, it was up 16 per cent.
After checking for cheaper quotes online, I rang my insurer and said I was going to leave. Admiral has taken over my old More Than policy and, it turns out, decided to give me a quote based on its most comprehensive Platinum level — to make sure that I had really good cover. How considerate.
But I felt less looked-after when it took me just five minutes on the phone to get £58 off the exact same policy. And when its Gold policy, which matched my cover last year, came out even cheaper than last year’s price, I felt rather miffed (but pleased at the same time).
I am not alone. The Money team is getting a constant stream of letters and emails from readers complaining about renewal quotes being much higher, despite them not having made a single claim.
It is exhausting doing the renewal dance of haggling, searching online, making sure that pricey-but-unnecessary add-ons have not been included every time an insurance policy is about to expire. It’s a rigmarole we could all do without.
Rules introduced in January 2022 by the Financial Conduct Authority, the City regulator, were meant to put a stop to this exhausting practice. The rules banned insurers from charging existing customers more than new ones, putting an end to the so-called loyalty penalty that put premiums up each year.
While many experts predicted significant price rises after the ban, the sheer scale has been staggering, particularly over the past 12 months. Customers regularly tell us about increases of 50 per cent or more. Money deputy editor Holly Mead had a renewal quote for her pet insurance last week that was up 84 per cent.
The Financial Services Consumer Panel, which advises the FCA, found in August that 80 per cent of car insurance customers were being offered increased premiums at renewal, 72 per cent for home, and 51 per cent for travel insurance.
• Home insurance providers compared
Insurers blame everything from the cost of labour for repairs to car thefts for rising prices.
The Association of British Insurers, a trade body, said: “Claims payments for home, motor and pet insurance have all hit record levels as a result of adverse weather, labour shortages and part delays, and an increase in the price of veterinary treatments, respectively. These pressures, coupled with broader price inflation, have affected premiums.”
But that doesn’t explain why you can easily get cheaper cover if you know which buttons to press. The panel found that 85 per cent of consumers who negotiated a car insurance renewal were able to get a price reduction.
Martyn James, a consumer champion, says that there is a “notable amount of wriggle room available to insurers when it comes to costs — so why not pass that on to all of us during these challenging times?”
The problem is that no one knows exactly how insurers set premiums. It is shrouded in a cloak of commercial sensitivity. Insurers should be forced to justify any significant price rises and show exactly how premiums are calculated.
We should not have to perform the renewal dance every time a policy ends. Insurers are penalising the more vulnerable customers such as the elderly and disabled, who are the least likely to switch regularly or haggle over the price.@JohannaMNoble