New FCA rules on motor insurance renewal pricing: what changes for you
The FCA's rules banning insurers from charging renewing customers more than equivalent new customers are now firmly established. Here's how they work, what to check, and what to do if you think you've been overcharged.
What the rules say
The FCA's general insurance pricing rules (in force since January 2022) prohibit insurers from charging renewing home and motor customers a higher price than they would charge an equivalent new customer going through the same channel (e.g. direct website). The practice — known as "price walking" — had seen some customers paying significantly more for loyalty than new customers paid for the same cover.
Under the rules, insurers must also make it easier to cancel auto-renewal and must show last year's premium on renewal notices. Full detail is in the FCA Policy Statement PS21/5.
What this means in practice
- Renewing customers must receive a price at least as good as an equivalent new customer via the same channel
- Your renewal notice must show last year's premium for direct comparison
- Auto-renewal must be easy to cancel — insurers must provide a simple cancellation mechanism
- Insurers who breach the rules face FCA enforcement action, including fines and customer redress
The rules do not mean your premium cannot rise — general market conditions, claims inflation, and changes in your risk profile can still drive increases. They prevent unfair discrimination against loyal customers. See our guide to how premiums are set for the legitimate factors behind price changes.
What to do at your next renewal
- Check the renewal notice for last year's premium and compare it to this year's quote.
- Use a comparison site to benchmark the renewal against what new customers pay for equivalent cover.
- Contact your insurer if you believe their price is not compliant — ask them to justify the difference.
- If unsatisfied, switch — switching at renewal is now frictionless for most policies.
Renewal rules FAQ
Frequently asked questions
- The FCA's general insurance pricing rules (PS21/5) apply to home and motor insurance sold through personal lines channels in the UK. They do not currently extend to commercial insurance, health insurance, or travel insurance sold in the UK. See the FCA Policy Statement PS21/5 for the full scope.
- Your renewal notice must show your previous year's premium so you can compare it. If your premium has risen significantly despite no changes in your circumstances, shopping around is the most effective check. Comparison sites give you an instant benchmark of what new customers pay for equivalent cover. The ABI's motor premium tracker publishes average renewal prices by region.
- Raise a formal complaint with your insurer citing the FCA's pricing rules. If unresolved, escalate to the Financial Ombudsman Service. The FOS has upheld complaints where insurers could not demonstrate their renewal price was calculated fairly.