Have you stayed with the same home insurance provider year after year? It's probably not working in your favour. Insurers are still overcharging loyal customers despite last year's Super Complaint launched by Citizens Advice in 2019. The Financial Conduct Authority (FCA) have released a report on insurance pricing practices, and the results are not encouraging. The report finds that 'price walking', when an insurance puts up premiums for customers who are on automatic annual renewal is still rife.
What's worse is these practices are not disclosed to a customer prior to signing the insurance contract. New customers are often enticed by a good insurance deal, but then find that their premiums suddenly go up the next year without any warning.
Moreover, particularly in the home insurance sector, customers on lower incomes (below £30,000) were found to be paying a poverty premium, with insurers hiking up their prices precisely because those customers are financially vulnerable and less likely to be willing to switch providers (pensioners often fall into this category).
Add to that a lack of transparency in policy documents, and additional charges and fees that are not properly disclosed, and you're looking at paying a very high price for loyalty indeed.
The FCA's recommendations to those who pay for insurance are unambiguous: be prepared to negotiate, and if the insurer doesn't budge, switch providers. You should also always opt out of auto renewal to protect yourself from being stung by premium hikes.
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