Martin Lewis has warned that people should “never” auto-renew their insurance, with inflation poised to see prices explode across the board.
Speaking on the Martin Lewis Money Show this evening, the money advice guru informed Britons that insurance prices are surging in the UK despite recent moves from financial regulators.
He explained that, in the months following a decision by the Financial Conduct Authority (FCA) to ban practices that saddled loyal customers with more expensive plans, another variable has taken their place.
The expert said the country has now entered a “huge insurance inflationary period”, which is now pushing prices beyond highs established in 2022.
The hostile environment means that, while Britons may have felt reassured they could remain on the same plan without fearing price hikes, they should now start shopping around for potential new providers.
During his main briefing tonight, Mr Lewis warned that the reason for insurance price hikes on insurance plans has recently changed.
Before 2022, he said price increases for loyal customers resulted from “price walking”, where companies would gradually “walk the price up” each year.
In January 2022, the FCA banned price walking and loyalty penalties, a move Mr Lewis said was “meant to make everything simpler”.
But prices have risen regardless, with inflation raising car insurance costs by more than 60 per cent and home insurance not far behind.
He has urged people not to assume their renewal prices for home and car insurance are the cheapest and to take note of how the FCA’s new rules function.
Mr Lewis said: “Don’t assume your renewal price is the cheapest price you can get on home and car insurance.
“The worst thing you can do is doing nothing. Never auto-renew without checking elsewhere.”
He added: “What you need to do is watch out for some giant baboons, because you know what baboons have? Big buts.”
Mr Lewis explained the new rules in question are “channel specific”, meaning that new customers cannot receive cheaper prices than those on longtime plans if they go through exactly the same process.
He added that prices can vary hugely by firm and desired customers, meaning that people “need to investigate the market” if they want a cheaper price.
