INSURANCE CON COSTS FAMILIES £350 A YEAR
Finally firms face probe after years of ripping off loyal customers
AN investigation has been launched into the sly tactics of insurance companies.
The Financial Conduct Authority probe will look at tricks such as charging loyal customers extra.
A typical family pays £350 too much to cover both home and car. Which? said: “Loyal policyholders have been exploited for years.”
SNEAKY insurance firms charge millions of loyal customers more than new ones – but this rip-off could finally be about to change.
The Financial Conduct Authority has launched an investigation into the sector with a promise to clamp down.
A key issue is premiums being hiked when policies are up for renewal each year, while new customers get lured in with the cheapest rates. Chris Woolard, of the FCA, said: “We don’t want to punish those able to shop around and find the best prices.
“But the other end of extremes is that people who remain loyal, some who maybe don’t have access to the internet, are paying a price for that.”
Gareth Shaw, from Which?, said: “This review is long overdue. For years, loyal policyholders have been exploited by insurance providers... and have had to battle with unclear pricing that makes it difficult for people to understand whether or not they’re getting a fair deal.”
Britons cough up £4.5billion more than they need to each year for car and home insurance. Comparison website GoCompare says that for the typical family that stays loyal it works out as £350 extra.
FCA powers include fines and prosecutions. It brought in rules last year to force providers to clearly show current and new premiums on renewal papers. But not all firms are complying.
It said those who renew home insurance for five years with the same company will be paying 70% more than new customers.