Price war means consumers lose out
Published on : 13/06/2007
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An ongoing price war in the home insurance market means that many consumers are losing out - as more loyal customers are charged more and suffer worse customer service, with providers desperately competing to win new business, a new study says.
The report, from leading financial research company Defaqto, reveals that many home insurers are offering huge discounts and incentives to new customers, while neglecting the needs of their existing consumer base.
"It hardly seems in keeping with the Financial Service Authority's (FSA) rules for Treating Customers Fairly (TCF) that two customers with exactly the same risks should pay markedly differing amounts for their policies," Brian Brown, author of the report and Defaqto's head of insight, commented.
"It would appear that increasingly loyalty never goes unpunished and rewards are only available for the disloyal.
"The rise in expensive home entertainment systems means that an increasing number of homeowners are likely to be underinsured. As ever, customers need to check carefully the quality of cover that they are getting is adequate because cheapest is rarely best."
