MARTIN Lewis is warning drivers and homeowners that they should check deals now – even if their policies are not up for renewal.
This is because a set of insurance rule changes that come into force from January 1 could leave people worse off.
Traditionally, people who stayed with insurers for a long time would see price hikes that meant they were significantly overpaying.
Meanwhile, new customers could take advantage of much cheaper offers that enticed them to switch provider.
The new rules are aimed to eliminate these loyalty penalties, meaning new insurers can't offer new customers better deals than existing ones anymore.
While that might seem like good news, in reality, it is likely to mean more expensive prices for people who switch, Martin warned in his weekly MoneySavingExpert tips email.
The finance guru said: "My guess is firms won't just cut renewals to match newbies' prices. They'll drop 'em somewhat, and increase new-customer rates – meeting towards the middle.
"While the new regime officially starts in January, as it's a big job, insurers will likely start to shift pricing algorithms sooner, so the clock is ticking and the cheapest prices may start to disappear within weeks or months."
He is advising that home and car insurance customers start shopping around now to secure the best deals before they disappear.
You should be able to cancel your insurance even if you're mid-policy and get a pro-rata refund.
There could be an admin fee for doing this, so you need to make sure that's less than you'll save by switching. Typically these are under £50.
Martin added: "Even if you can't save now, but can match your current price, it may be worth doing in case prices rise. This is far shakier territory though, as it involves some crystal-ball gazing. So I'll leave it up to you."
How to switch car or home insurance
The first thing to do is shop around for the best deal for you.
Comparison sites such as Go Compare, Compare the Market, Uswitch and MoneySupermarket are good places to start.
It's usually worth using more than one, as different comparison sites will have different deals.
Some insurers, most famously Direct Line, don't use these comparison sites so it's worth checking their websites direct for quotes.
Remember, you don't necessarily want the cheapest policies you can find. You need to look carefully at factors like the excess and limits to find insurance that suits you.
Once you've found the best policy, switch across. Alternatively, if you like your current provider, you can show them the policy you've found and see if they'll match it.
There's no guarantee, but haggling is a good way to drive down costs, and if your insurer doesn't offer you a deal you can always switch.
If you are switching, make sure you do a check on Quidco and TopCashback to see if you can also earn cashback on top.
There are a fair few tricks to help you cut costs on car insurance further. For instance, research by Compare The Market found that policies are £319 cheaper if drivers switch three weeks before their renewal date compared with switching the day a policy ends.
Paying annually, getting a black box and adding a named driver are all other tactics that can help.We've rounded up the best nine strategies in our guide.
Tweaking your job title is another way to knock hundreds off your bill. This doesn't mean lying – which is a bad idea – but deciding whether to select 'cook' or 'chef' for instance.
Martin Lewis' MoneySavingExpert has built a clever tool to help you do this legitimately and not in a way that it will invalidate your insurance.
There's also plenty of ways to reduce your home insurance bill. The main ones are:
- Shopping for a combine policy
- Installing a burglar alarm
- Paying annually
- Increasing your excess
- Joining a Neighbourhood Watch group
We've explained all the best tips and tricks in our home insurance guide.
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