“Radical” change in home and auto insurance

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Whoever renews his home or auto insurance should not pay more than a new customer, as part of a plan to disrupt the sector.

The Financial Conduct Authority (FCA) said the “sweeping” reforms would save consumers £ 3.7 billion over 10 years.

If passed, the plans would see customers, old and new, buy on the same channel and get the same price.

So those who would buy, for example, online would get an equivalent offer, whether it was a renewal or a new customer.

Christopher Woolard, FCA Interim Managing Director, said: “We are consulting on a radical package that would ensure that companies can no longer charge repeat customers more than new customers in the future, and end high pricing. high paid by some for a long time. customers. ”

The FCA has looked at ways to prevent six million people from paying an average of £ 200 too much on premiums.

Overall, the FCA had suggested that consumers were overpaying by £ 1.2 billion a year.

‘Loyalty penalty’

The FCA has sought to tackle the loyalty penalty – a result of growing and encouraging shopping around insurance, overdrafts and utilities.

Those who change get the best deals as new customers. Those who remain loyal are charged more.

This is accentuated by the poverty premium – you get a worse deal if your finances are less “resilient”, you have trouble managing your money, or you don’t have internet access to find the cheapest deals.

The regulator’s research into home and auto insurance had previously found that more than one in 10 people were paying very high prices for their coverage. One in three people were vulnerable in one way or another, perhaps old or less well paid.

He said some insurers were targeting price increases on those least likely to change.

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