Thirteen million UK households possibly being overcharged for home insurance
(ShareCast News) - As many as 13m households in the UK are being overcharged by home insurance companies for renewing their existing policy, new official research has found.
Citizens Advice announced on Friday that charging loyal customers more than new customers had become a market-wide practice, with companies levying large premiums every time customers renewed their policies.
Older people were more susceptible to these additional costs, according to Citizens, who highlighted that 40% of customers over the age of 65 had held their home insurance policy for more than five years, meaning that they could be paying 70% more than an average new customer for a new policy.
For those with the cheapest policy for buildings and contents insurance that would translate into an additional £110 a year on average.
The Financial Conduct Authority set new rules earlier in 2017 to help consumers, forcing companies to explicitly inform customers about their premiums over the previous year at renewal. However, many had failed to follow the regulations.
The research also suggested that people with mental health issues, on low incomes as well as the disabled were less likely to engage with home insurance providers when their policies came up for renewal, with only half of the consumers able to identify excessive charges on their premiums.
Gillian Guy, chief executive of Citizens Advice, said: "Home insurance companies are taking advantage of people's loyalty, and it's older people who are suffering the most.
"The Financial Conduct Authority must stop home insurance providers overcharging customers. Vulnerable customers are the hardest hit and must be protected from this unfair practice."
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