Hundreds of pounds are lost each year as consumers do not search for cheaper insurance policies.

Insurance companies are now being forced to bring their premiums down according to Peter Gerrard, head of research at price comparison site, moneysupermarket.com.

He explained that insurers are trying to offer consumers the best deals as “they are having to be more reactive and more competitive and bring their premiums down, and the result is increased competition. So what might be a really cheap policy may still offer some really good benefits.”

The Competition Commission sector indicated that Payment Protection Insurance, (PPI) will also overcome many changes after the Competition Commission found that consumers were overpaying up to £1.4 billion because UK consumers were unaware that they could shop around.

The PPI changes would be giving consumers the power they had before in order to help them to be more alert of the importance of shopping around.

Price comparison site, Uswitch.com said- “Just because the cost of the average policy had gone up, it doesn’t mean people can’t still get a good deal if they shop around.”

Consumers could save over a hundred pounds if they searched for the right insurance premiums such as life insurance, home insurance, and car insurance.

However, James Caldwell director of the Fair Investment Company website said- “Motorists should always be careful choosing their car insurance by price alone, the cheapest car insurance is not always the best and there are other aspects to be taken into consideration.”