Loyalty raises cost of home insurance

♦ A loyalty penalty sees home insurance customers who stick with the same provider overcharged by £75 a year, a study found.

The research by Which? showed that with 19million home insurance policies in the UK, providers were unfairly raising premiums for loyal customers.

The investigation found that customers were being penalised for staying with their provider longer and charged, on average, £75 (38per cent) more annually for combined policies than new customers.

Which? found the disparity between what new and existing customers paid steadily increased the longer a customer had been with the insurance provider.

Harry Rose, Which? money editor, said: “It is unacceptable that longstanding policyholders are taken for granted by insurance providers and hit by excessive premiums.”