NEW rules came into force this month to stop people overpaying for insurance, but some of those selling cover say they do not go far enough.

To make it easier to compare costs, since April 1 anyone sending renewal information to the public, including providers, brokers, banks and other retailers, must show the current premium, including any mid-term changes, as well as the new price.

Regulator the Financial Conduct Authority (FCA) says they must also encourage customers buying everything from motor to home policies to check their cover and consider looking elsewhere for a better deal, particularly if they have been with the same firm for four years in a row.

James Bridge, head of conduct regulation at industry body the ABI, said: “These changes should help more people see if their renewal quote has changed and to decide if they want to shop around.”

Letters to longstanding customers must now point out that going elsewhere could enable them to “get the insurance cover you want at a better price”.

However, the FCA does not prescribe how similar advice to those who have renewed less than five times should be expressed, only that it must be clear, accurate and prominent.

Lee Griffin, chief operating officer of Gocompare.com, said: “Five years with the same provider is too long. We’d like to see a renewal process where customers are actively encouraged to shop around every year.”

Mr Griffin fears the new rules may send consumers the wrong message. He explained: “It is implied that it is okay to stick with the same insurer for five years, and they only really need to switch after that.

“A lot can and does happen in the world of insurance and often in a short space of time, so it isn’t safe to assume that the policy you bought last year is still the best fit and best value for you now, never mind one you bought four or five years ago.”

According to price comparison site MoneySuperMarket the changes will not prevent eight million people wasting £2.37 billion in the next 12 months by automatically renewing their car cover.

It estimates that 53 per cent of UK drivers stay with their existing provider and, despite the new messaging, it predicts that 41 per cent who auto-renewed last year will do the same this time.

Kevin Pratt, MoneySuperMarket’s consumer affairs expert, said: “It’s blindingly obvious that the new FCA rules are not stringent enough to create a switch-and-save culture.

“Until and unless switching becomes a habit, providers will remain unmotivated to offer the most competitive rates to loyal customers. Shopping around is the best way for drivers to find the most competitive price and that can mean a difference of up to £275 every year.

“We already know about the 20 per cent increase in insurance premium tax in June and insurers are also suggesting that reforms to the way personal injury payouts are calculated will add a further £50 to £70 to annual premiums. That makes it more important than ever to be proactive about securing the best deal possible.”

But not all insurance is worth having. Drivers are required to take out at least third-party cover. However, this can be a false economy as it does not protect against fire, theft or damage to your vehicle. Comprehensive cover may cost less, but even if it does not, it is a wise investment. For older cars, breakdown insurance can be sensible too.

Anyone who owns their home would be foolish not to have a policy to pay for rebuilding after a fire or other catastrophe, and every householder, whether they own or rent, should protect their belongings against damage and theft.

Life insurance is optional for those without children or a partner, but anyone with dependents should cover at least the value of any mortgage so loved ones are not left homeless.

For those with family, income protection, which provides a monthly payment to supplement savings and state benefits during illness or unemployment, is frequently a better investment than critical illness cover, which is more limited. But anyone considering buying should take into account anything their employer provides beyond statutory sick pay.

Payment protection (PPI), which is intended to make credit card, mortgage or personal loan repayments in the event of sickness or job loss, has often been mis-sold. It is disproportionately costly, notoriously difficult to claim on and generally best avoided.

If you are going abroad, even just to mainland Europe, travel cover is vital. Private medical and dental insurance are only for those with significant excess income, but it makes sense to take cover for pets.

Mobile phone and other gadget policies are expensive, hard to claim on and often duplicate contents policies. Identity theft insurance is another a waste of money as, provided you have not been ridiculously negligent, the institutions involved must reimburse any losses.

Extended warranties are rarely worthwhile either – most appliances break down while still under guarantee. Boiler policies are costly and riddled with exclusions too, making it more sensible to deposit premiums in a savings account and dip in if repairs are required.

To get the best deal when buying any type of insurance, make a diary note for at least three weeks before the renewal date to allow plenty of time to consider your options.

Never accept a quote without checking if it is competitive. Read the small print so you can make like-for-like comparisons, understand all charges, penalties, exclusions, terms and conditions and be certain if it is right for you.

Enlist the help of an independent broker or gather information from comparison sites, but check more than one as they do not all list the same providers. A few insurers, such as Aviva and Direct Line, do not appear on any, but it is easy to get additional quotes from their sites.

The process should not take more than an hour or so for each type of insurance and could save you hundreds of pounds.

Do not focus exclusively on cost at the expense of protection, though – a policy that does not pay out when you need it is worse than useless.

Mr Bridge said: “Customers should always remember to choose the cover that meets their needs, and not simply buy on price alone.”