A study by charity network Citizens Advice suggests that UK’s home insurance providers are overcharging their loyal customers. The research done by the service suggested that around 13 million people are overcharged and the elderly are the worst hit. According to the research, home insurance companies charge 70% less to lure new customers to buy new home insurance cover. On the other hand, they charge more from customers that have stayed with them. As most customers aged above 65 years have a tendency to stick to the same home insurance provider, they keep paying 70% more on their home insurance premiums than the new customer.
As per statistics, 13 million customers are paying around £110 a year more on their home and content insurance cover than what is offered to the new customers. Companies often charge more when the customer renews their content and home insurance cover and around one third of customers are falling prey to this trick.
Gillian Guy, chief executive at Citizens Advice stated that “Home insurance companies are taking advantage of people’s loyalty, and its older people who are suffering the most. Vulnerable customers are the hardest hit and must be protected from this unfair practice.”
Gillian Guy also mentioned that the Financial Conduct Authority would be taking charge of abolishing the practice of overcharging home insurance customers. In the beginning of the year, FCA declared that home insurance providers need to inform their customers about the increase in premiums during the renewal times. However, it mentioned that many home insurance providers do not comply with the same rule.
Citizens Advice made it clear that overcharging loyal customers has become a market wide practice. Shay Ramani shared his opinion on this and stated that “Utility providers like UK home insurance providers follow the practice of overcharging their old customers so, everything boils down to the customer’s method of dealing with the situation. The customers need to shop around and switch to cheaper home insurance providers to get the maximum amount of discounts offered to new customers. They need to be vigilant, active and ready to switch to get cheaper home insurance premiums. This is the best way to save on home insurance and utilities bills.”
To conclude, the best way to save on home insurance cover is to switch insurance providers. If customers find shopping around a hard nut to crack then they can use the price comparison service of FreePriceCompare and switch to the cheapest home insurance provider. You can also get discounts on home insurance cover by choosing cheaper insurance providers. Just choose to switch and save on home insurance premiums. To know more about our services and how we can get you the cheapest home insurance cover, feel free to visit us at www.freepricecompare.com or call our price comparison experts on 02034757476.