the times | Saturday January 1 2022 33
News
Homeowners and drivers face insur-
ance price rises of hundreds of pounds
this year as companies plot a “budget
airline model” of burying expensive
extras behind cheap headline prices.
Home and motor insurers face a
£1.2 billion annual black hole in their
finances — about £200 per customer —
after being banned by the City regula-
tor from overcharging long-standing
policyholders to subsidise cheap offers
for new ones.
The end of the “loyalty penalty” will
save policyholders who do not switch
providers £4.2 billion in the next
decade, according to the Financial
Conduct Authority.
The Association of British Insurers,
the industry’s representative body, has
confirmed that the industry will res-
pond to the new rules by increasing
prices for new customers as they try to
make up for the lost cash.
Consumer experts believe the rises
may not be immediately obvious and
warned the industry is moving towards
the “bolt-on” model used by budget air-
lines, in which customers are lured with
cheap headline prices but face paying
extra for a blizzard of add-ons.
There has been an increase in the
number of bolt-on policies promoted by
the industry in recent months. They
have included companies promoting
lost key cover instead of folding it into
policies, which costs up to £25 per policy
for £2,500 of cover. In addition, many
vehicle insurers are excluding courtesy
car cover and advertising it as a separate
add-on policy costing up to £30.
Martyn James, at Resolver, the com-
plaints service, said that the extras
would make some policies bewildering
to choose from because some more ex-
pensive policies would include them
and some cheaper ones would not.
“The insurance industry looks set to
recoup its losses from the loyalty
charge in many ways, so watch out for
the airline model, and question why
bouclé wool and
blue denim. Net-
A-Porter has
classic black
leather styles
from Gucci
and Tom
Ford. But it’s
not just high-
end designers
pushing the
original bad-boy
symbol. It abounds
in new season high
street collections
too. Mango’s bikercomes with faux-
shearling lining, Zara’s
is oversized and belted
and Reiss’s has an
asymmetric zip.
The way to wear
them in 2022 isn’t fit
for straddling a
motorcycle: the British
model Lady Mary
Charteris wore her
pink biker with silky
wide-leg trousers.
The Insta-crowd are
styling theirs with high
hemlines, bare legs
and riding boots.
You can pair yours
with jeans and a
T-shirt: at least one
thing that’s easy about
2022.Zara and YSL have gone
for black, oversized
and belted. Lady Mary
Charteris favours a
pink biker jacketY
ou’ve washed
the
champagne
flutes and set
a few
resolutions (Hannah
Rogers writes). Now,
what will you wear in
2022?
The style set know.
They had their new
year wardrobes
dictated to them by
catwalk designers in
September. According
to them there’s one
item to have now, and
the good news is
there’s a reasonable
chance it is already
hanging in your coat
cupboard.
That’s right. All you
need to be on trend
this year is a biker
jacket. On Simone
Rocha’s spring
2022 runway they
came longline,
belted and with
puffed sleeves;
Richard
Quinn’s
iteration was
covered in
punky spiked
studs. Alexander
McQueen’s 2022 biker
is half denim, half
leather; Dior’s is a
glossy patent black and
Prada’s has shoulder
padding and a triangle
logo tagged zip.
At luxury e-tailer
Browns, new-season
biker jackets come
sequin covered, inOn your biker! The
original bad-boy
look is back in town
Premiums to soar
as insurers charge
for bolt-on extras
you have to pay extra for things that
used to be part of your policy,” he said.
Research published in The Sunday
Times last week revealed that insurers
were finding new ways of adding to pre-
miums without the extra cost showing
up on headline prices. It found that
insurers including Admiral, Co-op
Insurance, Lloyds, Halifax, Post Office
Money and Sainsbury’s Bank had in-
creased their fees to cancel, rearrange
or set up policies in the past two years.
The charges usually range from £20 to
£60 but can exceed £100.
In the months leading up to today’s
changes, many firms have dropped
their headline prices in an attempt to
recruit as many new customers as poss-
ible. The Association of British Insurers
said that the average car premium fell
from £483 in the final quarter of 2019 to
£429 in the third quarter of this year.
The price of the average building and
contents insurance policy, meanwhile,
has risen only slightly, from £315 to
£320, in the third quarter of the year.
Home and car insurance costs have
dropped over the past two years
because people have been spending
longer in their homes during the
pandemic, reducing the risk of burg-
lary, and driving less during lockdowns,
reducing accident rates.
James Dalton, director of general
insurance policy at the Association of
British Insurers, said that the body sup-
ported the reforms but that prices
would rise. “While the FCA recognises
these changes could lead to price rises
for some who shop around regularly, all
customers should get fairer outcomes
in the UK’s competitive home and
motor insurance markets,” he said.
Sheldon Mills, the FCA’s executive
director of consumers and competition,
warned it would be monitoring compli-
ance with the rules. “We are keeping a
close eye on how insurers respond to
our new rules, to ensure that the bene-
fits of a better insurance market are
delivered to consumers,” he said.
Bye-bye nasty insurers, Money, page 57David Byers Assistant Money Editor