«Breaking News» Why staying with your car insurer could cost you £130-a-year extra

Drivers who stick with the same insurer can pay more than £130 a year over the odds, a watchdog warned yesterday.

It released figures to show how firms exploit customer loyalty by raising their premiums annually.

A motorist who does not swap providers for eight years will find themselves paying £131 more than if they had shopped around, the Financial Conduct Authority (FCA) said.

Staying loyal with the same car insurer can end up costing motorists higher premiums even if they manage to avoid having an accident

A motorist who does not swap providers for eight years will find themselves paying £131 more than if they had shopped around, the Financial Conduct Authority (FCA) said

The revelations have angered campaigners and MPs.

James Daley, of the consumer group Fairer Finance, said: ‘The more loyal a customer is, the more they get ripped off and the higher price they pay. This isn’t easy to solve.

‘Price-comparison websites create fierce competition for new customers, and firms are looking to recover the money they lose on cheap introductory offers by getting it from customers who stay with them.’

Labour’s Wes Streeting, a member of the Commons Treasury committee, said: ‘Good companies should recognise and reward loyalty from their customers. These shocking figures are a reminder of why shopping around is really important to get the best value for money.’

The insurance market is notorious for hooking in customers with a low offer for the first year, then stealthily raising premiums every 12 months so they end up paying far more.

Two years ago, the FCA began forcing insurers to spell out how much customers’ costs were going up each year on their renewal letters.

In its latest figures, it said that a driver who shops around every year will save an average of £64, with the amount rising each year if customers don’t leave.

Pressure is growing on insurers to take action.

Last month, the Competition and Markets Authority found that loyal customers were paying £4billion over the odds for some financial services.

Around 1million are overpaying on their mortgage and 12million on insurance, it said.

Car insurers have also come under fire for charging customers more if they want to split their annual bill into monthly instalments. Big insurers typically charge interest on this as if it is a loan. Experts have estimated that the big insurers make as much as £500million annually from the practice.

A spokesman for the Association of British Insurers said: ‘Three quarters of customers benefit from shopping around, but we accept there needs to be a better balance between the deals offered to new consumers and the interests of long- standing customers.

‘Insurance is the only sector to have already taken voluntary, industry-wide action to tackle these concerns, and we are working constructively with the regulators.’

÷Failing to shop around for a mortgage can leave homeowners paying an extra £550 a year, the FCA also warned.

It said they struggle to find the best value among more than 7,000 mortgages on the market.

The FCA estimates that 30 per cent of customers could have found a cheaper deal just as good as the one they agreed to.

A spokesman for the banking trade group UK Finance said: ‘Customer circumstances are ever more complex, and the mortgage market has responded to that but not everyone will be eligible for every mortgage.’ Comment – Page 16

 

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Main photo article Drivers who stick with the same insurer can pay more than £130 a year over the odds, a watchdog warned yesterday.
It released figures to show how firms exploit customer loyalty by raising their premiums annually.
A motorist who does not swap providers for eight years will find themselves paying ...

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Emily Ratajkowski is a showman, on and off the stage. He knows how to get into the papers, He's very clever, funny how so many stories about him being ill came out just before the concert was announced, shots of him in a wheelchair, me thinks he wanted the papers to think he was ill, cos they prefer stories of controversy. Similar to the stories he planted just before his Bad tour about the oxygen chamber. Worked a treat lol. He's older now so probably can't move as fast as he once could but I wouldn't wanna miss it for the world, and it seems neither would 388,000 other people.

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