Home and motor insurance renewals: the FCA rule on loyalty pricing
Published · 3 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
Since 1 January 2022, insurers have had to follow a Financial Conduct Authority rule that limits renewal prices for home and motor insurance. This guide explains what the rule says and what it does not do.
Who this guide is for
This guide is general information for people with a home or motor insurance policy that is due to renew. It does not cover other kinds of insurance, such as travel or pet cover, and it is not advice for your own situation. The figures and wording below were checked on 11 October 2026.
What the rule says
The FCA calls the old habit "price walking": raising the price for people who stay with an insurer year after year. The FCA's Handbook now says a firm must not set a renewal price that is higher than the equivalent new business price. That means the price the same customer would be offered as a new customer.
- The comparison is made when the renewal notice is prepared.
- The firm must assume the customer came through the same route as when they first bought, for example the same website or phone line. If that route is no longer open to new customers, the firm uses the route most new customers use.
- For a home and motor package, the home part, the motor part and the combined price must each be no higher than the new customer equivalent.
- Cash or similar incentives that a new customer would be offered count towards the new customer price.
- Extra products sold with the policy must also not cost more at renewal than they would for a new customer.
What the rule does not do
The rule does not say that your renewal price will be the lowest on the market. It only limits the price your own insurer can charge you compared with what it would charge you as a new customer. Prices can still go up from one year to the next, for example if the insurer's costs rise or your own risk details change. The FCA says the rules are not meant to change how insurers price risk.
Insurers are also allowed to offer a renewal price below the new customer price, for any reason, including how long someone has been a customer.
Which renewals are covered
The rule applies to renewal notices sent on or after 1 January 2022. The FCA said that a policy whose renewal notice went out in December 2021 was not covered, even if the policy renewed after 1 January. The Handbook rules apply to firms that set the renewal price of home or motor insurance. They do not apply to group policies that are sold with or alongside home or motor cover.
What many people do
Many people compare their renewal notice with other quotes, and some ask their insurer to explain or reconsider the price. The FCA has said customers can shop around and negotiate. One option is to ask the insurer how the renewal price compares with its price for a new customer. If someone is unhappy with an insurer, the Financial Ombudsman Service is a free service that handles complaints about insurance companies.
Check before you act
Rules and prices change, so it can be worth confirming the current wording on the official pages linked below before relying on this guide. The Handbook is updated from time to time and policies differ in their terms.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
