Auto insurance premiums for renewing customers are double the price quoted on new ones, despite a recent ban on loyalty fines, according to motorists who contacted Guardian Money.

One customer was informed that their renewal premium would be £368.74, but comparable coverage with the same company was quoted at £215.22 on a price comparison website. When he complained, his renewal price was revised to £245.

Since January 1, insurers have been banned from overpaying loyal policyholders to fund discounts to attract new customers. According to the Financial Conduct Authority (FCA), which implemented the ban, 6 million customers staying with their provider will have £1.2 billion in 2018. It estimates the new rules will save consumers £4.2 billion over 10 years.
However, consumers who assume the ban will allow them to put their feet up without paying a price may be in for a shock. Loopholes in the new rules mean they might still spend more to renew an existing policy than to buy a new one from the same provider. Companies are still allowed to discriminate between new and existing customers depending on when and how they request a quote.

Martin Lewis, the founder of MoneySavingExpert, says that while some loyal consumers will save money thanks to the new rules, they may struggle to train whether they will be charged fairly. “The [loopholes] mean there’s wiggle room in the system, so it’s hard to pin down if insurers are playing games,” he says.

An FCA spokesperson says consumers still need to shop. They added, “We use a range of tools to assess corporate compliance, including in-depth analysis of corporate reporting data, as well as consumer and market intelligence.”

There are several hidden factors that can increase the price for new and existing customers