Half pay out more for insurance despite ban on ‘price walking’

HALF of homeowners and drivers have been forced to pay out more for insurance this year despite a ban on “loyalty penalties”.

In January, insurers were prohibited from charging existing customers more than new ones for the same policy. This ended the practice of keeping the best deals for new customers while charging existing policyholders more when they renew, known as “price walking”.

Even so, a quarter of those with home insurance who renewed their policy now pay more than they did last year, a survey by Which? found. Meanwhile, a third of those paying more had switched to a different provider. Drivers paid an extra £35, while homeowners were asked to fork out an additional £45 in the first six months of this year.

Jenny Ross, of Which?, said that with household budgets under huge strain, it was important not to renew an insurance policy without first checking if you could pay less.

“It’s still the case that the price quoted by your insurer is not necessarily the best price you can get,” she said. “Doing your research on comparison sites, haggling and switching remain effective ways of bringing down the cost of home and car insurance.”

However, haggling continued to be successful. A quarter of people discussed the price with their insurer this year and of those who did, half were given a reduction in their premiums. On average, premiums fell by £56 for car insurance and £54 for home insurance.

Those who switched paid £43 less on average than those renewing their existing car policies. Meanwhile, home insurance switchers saved £103.

Which? also warned that car insurance prices would continue to rise – driven higher due to increasing claims.