LOYAL customers could be paying up to £132 more for their home insurance than if they took out a new policy with their provider.
An investigation by Which? found that customers who’d been with their insurer for over a year actually pay 32 per cent more than new policy holders.
Customers who were on policies that were four to six years old were around 54 per cent more expensive compared to the prices paid by new customers.
The consumer group surveyed nearly 8,000 people and found that policy holders who’d been with the same insurer for over 20 years paid the most – around double the amount of what new customers paid.
The average premium paid for a combined insurance policy – building and contents – was £396 a year while for those with a policy under a year old, the annual premium was £195.
This is because insurers tend to drop prices for introductory rates to entice new customers.
How to find the best deal on home insurance
WHEN it comes to renewing your home insurance, you should always shop around, yet a third of us have never switched, according to Compare the Market.
Use a couple of different comparison sites to see what’s on offer.
Compare levels of cover and check the exclusions. Make sure you get the features you need and don’t pay for unnecessary extras.
Some major insurance companies including Direct Line, Aviva and Zurich are not on any comparison sites.
To make sure you get the best deal, check directly with these companies as well.
For more help working out what building and contents cover you need, go to the Money Advice Service.
But the advertised rates are often only available for a limited time, after which they often hike the price.
This leaves long-standing customers forking out more for their home insurance the longer they have been with their provider.
Which? spoke with one policy holder who was paying £554 a year for her home insurance after six years with her provider, but found the same policy on a comparison site for £335 – £219 less.
They also found that most insurers will let customers cancel their existing policies and take out the “new” one – which is the same – one that they’ve found for a cheaper rate elsewhere.
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But the consumer group warns that vulnerable customers who don’t switch are still at risk of being “exploited”.
Harry Rose, Which? Money Editor, said: “It is unacceptable that long-standing policyholders are taken for granted by insurance providers and hit by these excessive premiums.
“Insurers must make sure existing customers remain a priority, and are not sidelined by the push to attract new business.”
Telling your insurer about your mental health problems could push up bills by 2,000 per cent.
The FCA launched a review into travel insurance for cancer patients and others with specialist needs last year amid concerns they weren’t being treated fairly.
On a similar note, holidaymakers have been warned not to drink too much while awayas this could invalidate any claim on their insurance.
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