Consumers are to be given clearer information about their insurance premiums when their policy is up for renewal, under new proposals from the Association of British Insurers (ABI).
The ABI has written to the City watchdog, the Financial Conduct Authority, to outline plans that would see renewal documents include the premium customers paid last year and the new quote, making it easier for people to compare prices.
In many cases, this is not currently happening, leaving customers unaware that their premium may have increased.
Policy documents would also include a clear explanation of any introductory discounts that may have applied to new customers and which subsequently finished when the policy term expired.
Huw Evans, deputy director general of the ABI, said: “Our proposal, if adopted by the FCA across the market, would significantly improve transparency for millions of customers.”
In response, Which? executive director Richard Lloyd, said: “These simple changes could save people money by prompting them to shop around or haggle for a discount, and we urge the Financial Conduct Authority to adopt the proposals.”
The new rules, which will apply to motor and home and contents insurance, are expected to come into force by the end of 2015.