An estimated six million car and home insurance policyholders may be paying too much. Are you one of them?
The FCA has confirmed what many insurance customers have experienced for years: loyal customers get a worse deal compared with those who switch or haggle.
At Which? Money Helpline we regularly talk to people who are angry that the cost of their car or house insurance has increased dramatically over a number of years.
Instead of being rewarded for their loyalty many people feel that they are being taken advantage of.
I shop around for my home insurance every year. When my current insurer LV increased my insurance by almost 25% this year, I contacted it for an explanation.
LV told me that it was the best price it could give me and it was not able to justify the increase. However, after shopping around for alternative cover, I decided to stay with LV for another year.
I will of course shop around when I get my renewal letter next year.
Mr March from London has insured his house with Prudential for more than 30 years and was surprised when his renewal price for his buildings and contents insurance had actually gone down from £819 to £655 this year.
Worried that he may not have sufficient cover, he phoned the Which? Money Helpline.
After speaking to us, Mr March contacted two of the Which? Recommended home insurers. Mr March decided to switch to John Lewis as it quoted him just £340 for what looks like more comprehensive cover.
He also saved money on his car insurance after haggling with RAC over the cost of his breakdown cover. He was given a discount of £20 and an additional three months of cover for free.
Mr March told us:
What do you think?
Are insurers taking advantage of customer loyalty and ripping people off who don’t switch?
Or should we share some of the blame for not shopping around and switching insurer, especially given that it’s relatively easy to move to a new insurer?
Will any changes, and a possible ban on companies charging loyal customers more for insurance, mean that people who already switch insurer will end up paying more?
Helping our members
Did you know about our Money Helpline? It’s staffed by financial experts with more than 100 years’ experience in the financial services industry between them.
Members can ask us questions about a range of personal finance subjects, and there are no limits to the number of calls you and your family can make, or the length of time you can spend talking to us.
What we can help you with:
- Borrowing – credit cards and loans
- Car, home and travel insurance
- Equity release
- Long-term care
- Protection insurance
- Savings and Isas
(We do not offer regulated financial advice).
Which? members can call the helpline on 029 2267 0001. The Helpline is open Monday – Friday, 9am – 5pm.