Car and home insurance customers will stop paying a 'loyalty penalty' when their deal comes up for renewal from New Year’s Day.
New rules mean that insurers will be required to offer renewing customers a price that is no higher than they would pay as a new customer, but those who regularly shop around for a cheaper deal, who are often younger customers, could end up paying more, with discounts potentially becoming smaller.
Many firms have increased prices for existing customers each year at renewal in a practice known as 'price walking'. This has distorted the market as new customers may have been offered below-cost prices by firms to attract them in and then ended up paying more over time if they renewed their insurance.
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