Home insurance customers ‘pay more when loyal’

Loyal customers to home insurance companies are being penalised as firms battle out to cheapen prices rather then to extend services, according to a new report.

Defaqto, a data collection company, has found that rather than retaining established customers through extending cover or offering new and improved services to customers, firms would rather lower prices to attract new business.

This means that newer customers pay far less than loyal customers through various cash back deals, which have risen in frequency by 60 per cent in the last 12 months.

“It hardly seems in keeping with the Financial Services Authority’s rules for Treating Customers Fairly that two customers with exactly the same risks should pay markedly differing amounts for their policies,” said Brian Brown from Defaqto.

“It would appear that increasing loyalty never goes unpunished and rewards are only available for the disloyal.”

He recommends that consumers double-check their home insurance deals to see that any new purchases are still covered and that they still have a competitively-priced deal.

Tags: Financial Services Authority, customer, data collection company, company, competitively-priced deal, home insurance