Important Changes to Home & Car Insurance Rules 2022

The Insurance ‘Loyalty Penalty’ Ends in 2022. How Will This Affect You?

insurance changes

Changes to Home & Car Insurance Rules UK

insurance changes 2022

As of the 1st January, important changes are being made to home and car insurance rules.

The insurance ‘loyalty penalty’ has become a thing of the past. From now on, car and home insurers won’t be able to quote their existing customers more for renewing their insurance compared to new customers. 

This means that insurance providers cannot charge higher premiums to renewing customers than they would charge to an equivalent brand-new customer for the same policy. 

This new insurance rule aims to stop the currently widespread practice of ‘price walking’. This refers to when insurers increase their premiums for their existing customers each year. It also means new customers won’t have access to exclusive deals.

Although most customers shop around for their home and motor insurance every year, those who don’t have effectively been charged a ‘loyalty penalty’ for remaining with the same firm. 

These changes will be beneficial to some, as they will get rid of excessive differences in the prices paid for premiums by new customers and existing customers for equivalent insurance policies. 

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Will Switchers Lose Out Under the New Rules?

insurance 2022

The new 2022 car and home insurance rules mean that loyal customers should be protected from huge price hikes when renewing their car and home insurance policies. 

The Financial Conduct Authority (FCA) has itself acknowledged that these changes will likely lead to some customers paying higher prices, especially if they have previously benefited from big new-customer discounts. 

However, this would mean that customers couldn’t shop around and use comparison sites to find the cheapest and best deal for them.

Therefore, under the new insurance rules, premiums will continue to be calculated independently by insurers, using a wide range of factors. For example, for motor insurance these factors will include: 

  • A customer’s age
  • The type of vehicle 
  • Their driving record 
  • Claims history


So, when it comes to renewing your home or car insurance, it might be best to consider your options before sticking or switching providers. Some of the things you should consider when renewing your home and car insurance under the new rules include: 

  • Your needs – it is crucial that you buy the policy that most closely meet your needs, rather than simply opting for the cheapest option. 
  • Renewal terms – if considering renewing with your current issuer, check their renewal terms to make sure you’re aware of any price changes, scope of cover, new conditions and changes in your circumstances that you might need to inform your insurer of. 
  • Shop around – with a wide range of policies available from many different providers, the insurance market will continue to remain competitive, so it’s still worth using comparison sites to find the best deal. 

What Will Change Next Time You Renew?

insurance 2022

When you next renew your insurance policy, there may be a few changes. 

  • Deals might disappear – some of the discounted deals that were on offer might not be available now the new rules are in place. The new insurance changes could result in fewer enticing introductory premiums for new customers. 
  • Your renewal premium may still go up – a number of factors, such as whether you have made a claim in the past year; whether your risk has changed; or external factors (e.g. increased cost of vehicle repairs) could all impact on the price of your insurance renewal
  • Auto-renewal will continue – some insurance policies renew automatically after a year if you do nothing. This ensures you don’t find yourself inadvertently uninsured because you forgot to renew. But, the new rules will make it easier to cancel the auto-renewal of some policies. 

All of these changes to insurance will apply regardless of whether you buy insurance from an insurer, an insurance broker, a comparison website or a retailer. 

What's Happening to Insurance Premiums Now?

insurance rule changes 2022

Recently, the average price of car insurance premiums has been falling. According to ABI, £429 was the average price paid for insurance cover between July and September of 2021. This is 7% lower than it was a year earlier, and the lowest it’s been in over five years. 

However, this trend may not be set to continue. Recent reductions in premium prices have likely resulted from the impact of Covid-19 and the lockdowns. During this time, there was a drop in vehicle-related accidents due to fewer motorists driving on the roads. 

Many have also speculated that some insurers might have been taking advantage of the time before these insurance rules were introduced. 

They have taken advantage of attractive discounts to win over new customer ahead of the loyalty penalty ban. 

According to data from, the average price of home insurance premiums has also dropped, but not by as much. In fact, home insurance premiums have only declined by 5.1% since their peak in 2020.  

Nevertheless, with both home and car insurance, the run-up to 2022 has offered a prime opportunity to benefit from new customer deals. 

How to Get the Cheapest Insurance Deals in 2022

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So, with these new insurance rules coming into play, how can you get the best insurance deals in 2022? 

While the loyalty penalty ban is expected to make insurance pricing fairer, it will mean that customers who regularly switch providers lose a long-enjoyed advantage. 

However, this doesn’t mean you should accept the first price your insurer provides you as the best you can get. Tactics like shopping around and comparing deals will still be beneficial in 2022 and beyond. 

Here are out top tips for getting the best car and home insurance deals in 2022:

  • Switch insurer – the insurance market is still expected to remain competitive, so your car or home insurer will still have rivals that might be able to offer you a better deal. 
  • Check multiple comparison sites – do this regularly to see what quotes other insurers are offering you for comparable cover. 
  • Negotiate with insurers – don’t simply assume that the first price an insurer offers you is the best. The change in rules won’t mean insurers stop giving better deals to customers who haggle. 
  • Get quotes through different channels – whether you buy insurance through the phone, online, from a comparison site, from a broker or direct, it can have an impact on your price, and this will still apply after the new rules come in. 
  • Check your policy suits your needs – don’t just opt for the cheapest deal if it doesn’t cover your needs. Spend some time reading the documentation to ensure it’s not just a waste of money. 


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