LOYAL? OK HERE’S A PRICE HIKE

Homeowners are paying a third more by being loyal to their home insurance firm, new research reveals.

Which? Money found people who had been with their insurer for less than a year were paying an average £200 for cover. While those who had remained loyal for over a year had to fork out an average £264, with prices increasing the longer someone had stayed with the same provider.

This issue is being investigated by the Financial Conduct Authority. In early findings, it has found this unfairness exists as firms compete on pricing to lure in new business.

They then recoup the losses by hiking up renewal prices for loyal customers. While the FCA continues its investigation and decides how it might fix this broken market, you need to ensure you don’t get caught in the renewal premium trap.

Don’t automatically renew when your policy comes to an end – check if you can find the same level of cover for cheaper elsewhere.

If you don’t want to leave your current provider, get quotes from elsewhere and you can then haggle for a better deal. If your insurer won’t play ball and bring its price down, it could be time to ditch and switch.

Jenny Ross, Which? Money Editor, said: “Long standing home insurance customers continue to be hit by punitive price hikes, paying premiums as much as 75% higher than for new customers.

“As the regulator considers how to tackle these pricing practices, there are tricks customers can use to reduce their bill.

“Haggle with your provider at renewal or go elsewhere – and don’t pay monthly if you can afford to pay the annual premium up front, as most insurers will charge you interest.”