Martin Lewis has issued an urgent warning to car and home insurance customers.

Speaking on his ITV show, the Money Saving Expert warned people to be aware of a radical change to insurance rules coming on January 1.

New rules are set to be brought in by the Financial Conduct Authority to end loyalty premiums.

The change should level out prices in the long run but may lead to a short-term spike for those looking to switch insurance providers.

Martin Lewis' urgent warning on car and home insurance

On The Martin Lewis Money Show, Mr Lewis explained: “We have talked about this one the show before, but the time is really getting close now.

“This is an urgent warning on car and home insurance. There is a big rule change when the champagne corks pop on January 1.

“The insurance rules change radically. It is the end of the loyalty premium.

“From that date insurers must charge, on aggregate, existing customers the same as new customers. Currently existing customers pay a lot more.”

While that may be a good thing in the long run, Martin Lewis explained why it could lead to short term price hikes.

He added: “I know a lot of you will be cheering that, and it is a good thing generally, but, in the short term, switchers prices will likely jump.

“Don’t expect the prices of existing customers to drop to new customers levels.

“They are likely to meet in the middle somewhere, so prices for switchers will rise.”

Martin Lewis' top car and home insurance tips

Martin Lewis published his top tips for car and home insurance renewals on MoneySavingExpert.com.

They included:

  1. Check at least two comparison sites
  2. Compare that to Direct Line and other deals comparison sites miss
  3. See if a multicar policy is cheaper
  4. Check if comprehensive cover is cheaper than third party cover, and if adding a responsible extra driver cuts costs
  5. Check if you can get cashback
  6. If you want to stay where you then haggle