FCA urges new rules for add-on policies
THE FINANCIAL regulator has called for tighter restrictions on the sale of add-on insurance, which it believes is poor value and often sold to customers who don’t need it.
Christopher Woolard, director of policy at the Financial Conduct Authority, said this £1bn market is not operating competitively, adding that there is a clear case for the FCA to step in and protect consumers. “Firms must start putting consumers first and stop seeing them as pound signs,” he said. “Many consumers are simply not getting value for money.”
Add-on insurance refers to any policy sold alongside another product such as home cover. The FCA estimates that just 10 per cent of the value of the item was paid out in claims on add-on policies from 2008 to 2012. But insurers have warned that the figures are misleading.