Half of motorists think charging loyal car insurance customers more should be illegal
Fifty per cent of motorists think it should be illegal for insurers to charge existing customers more than new customers for the same cover, a new survey said today.
The research by price comparison site Go Compare showed 61 per cent of participants felt insurers treat existing customers less favourably by charging those who renew their cover higher prices than new customers.
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The survey comes as the insurance industry faces increasing scrutiny for its pricing practices.
The Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) have both probed the sector, looking at the “loyalty penalty” charged to long-standing customers.
Research by Citizens Advice published this month found home insurers make 100 per cent of their profits from customers holding policies for six years or more.
The FCA has started making insurers tell customers their previous year’s renewal cost and premium on renewal letters, to encourage customers to check if they still need the same level of coverage and remind them they can compare prices and cover offered by rivals.
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Despite the FCA’s new renewal regime being in place since April 2017, the survey found that only 46 per cent of drivers remembered seeing last year’s premium alongside their renewal price.
Last year, the CMA released a series of recommendations to tackle loyalty penalties including naming and shaming insurers who overcharge loyal customers, and using targeted price caps to protect vulnerable customers.
Lee Griffin of Go Compare said: “Loyal customers have every right to feel ripped-off.”