A new study from Citizens Advice reports that older people are paying an average of £110 annually more than they need to on their home insurance.
Consumer advice charity the Citizens Advice called for the Financial Conduct Authority (the FCA who regulate the UK’s financial services companies and market) to act following a survey of over 4,000 people.
The study (which was reported in Insurance Age magazine) showed that 40% of people had their insurance policy with the same insurer for over five years - with the over 65’s least likely to change providers.
The Citizens Advice said this means they could be paying 70% more than a new customer and that those with the cheapest form of buildings and contents cover could benefit from average savings of £110 annually.
James Bridge, Head of conduct regulation at the ABI said: “Many customers benefit from shopping around to get the right policy for their needs at the best price, taking advantage of what are in effect introductory discounts.
”We recognise, however, that in a competitive market, those that don’t shop around may not always get the best deal.
”This is why we pushed for the new rules on renewal notices displaying both the existing and new premium to prompt customers, including the over 65s, to think about shopping around.”
He added that the FCA has identified that some firms have challenges with implementing the new rules and the ABI expects those companies to work with the regulator to put them right.
New rules regarding renewal notices
The new rules regarding renewal notices on home and car insurance policies came in to force in April this year and require firms to:
- disclose last year’s premium at each renewal, so that it can be easily compared to the new premium offered;
- identify consumers who have renewed four, or more, consecutive times, and give these consumers an additional prescribed message encouraging them to shop around;
- encourage consumers to check their cover and shop around for the best deal at each renewal.
Getting the most cost-effective deal
Commenting on the study, Steve Bradley, MD of property insurance specialist UKinsuranceNET said: “It is shocking that some people are still overpaying for their home insurance cover.
“At UKinsuranceNET we pride ourselves on always trying to offer the most cost-effective cover – including at renewal time. With 9 out of 10 of our customers staying with us when they renew, I think we are doing something right.
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