An investigation into home insurance premiums by the consumer organisation Which? revealed that buyers who remain with their insurer for longer than 12 months are paying up to 38% (up to £105) more than new customers*.
Which? reported that of the 5,592 owners of buildings and contents (combined) policies in the survey who told them what they were paying, new customers were being charged a median premium of £195. Those who had been with the insurer for one to two years paid an average of £220 – and if they had stayed with the same firm for four to six years, the average was £300.
According to the Financial Conduct Authority (FCA), efforts are being made to look into the issue of dual pricing. It said: “If competition is working well in a market, it should not overly disadvantage existing customers over new customers. While many firms have made progress in putting customers more firmly at the centre of their business models, they need to further improve both competition and their standards of treatment for existing customers.”
Which? also said that dual pricing also affected the 1,674 respondents owning contents-only policies with policyholders paying around £100, jumping to £120 after 12 month and those with policies held for four to six years paid £144 per year.
Customers were not moving between providers even though they had seen their premiums increase, with 69% of respondents saying they had been with their insurer for over a year.
The Association of British Insurers and the British Insurance Brokers’ Association recently pledged to tackle dual pricing in personal lines.
At payingtoomuch.com, we strive to find the best deals for our customers each year so they aren’t faced with accepting an increased policy.
*Which? surveyed members of the general public who held a home insurance policy, asking them how long they had been with their provider and how much they’d paid this year.
