Which? investigation finds loyal home insurance customers being exploited


Thousands could be paying excessive home insurance premiums, as a Which? investigation reveals loyal customers are penalised with price hikes for staying with a provider.

In an investigation into home insurance premiums, the consumer champion found customers with combined policies owned for longer than a year were paying, on average £75 (38%) more annually than new customers.

For contents cover, existing customers paid, on average, £132 annually – 32 per cent more than new policyholders.

Which? found the disparity between what new and existing customers paid steadily increased the longer a customer had been with the same insurance provider.

Customers who’d been with the same insurer for over 20 years paid the most – around double the amount of what new customers paid. For combined insurance, the average premium paid for a policy 20 or more years old was £396 a year, while for those with a policy under a year old, the annual premium paid was £195.

Insurance pricing is most competitive for new customers – with policies sold at a discount, sometimes at a loss, during the first year to attract new business. However, it notoriously leads to hikes during renewals and can mean long-standing customers are unfairly penalised.

Which? research revealed combined policies that were four to six years old were around 54 per cent more expensive compared to the prices paid by new customers.

It is clear that staying with an insurance provider doesn’t pay, yet 69 per cent of respondents in Which?’s survey had been with their insurer for longer than a year.

Worryingly, one in six of those aged over 75 had held their cover with the same provider for over 10 years and may have seen their premiums almost double in that time.

Which? spoke with one customer who was paying £554 a year for her home insurance after six years with her provider. However, on Compare the Market she spotted the exact same policy was available to new customers for £335, prompting her to cancel her policy and reapply to access the new customer discount – saving £219.

Surprisingly, many insurers do allow customers to cancel their existing policy to take out a ‘new’ one at a cheaper price.

However, vulnerable customers who are perhaps not as savvy online could find themselves paying trumped-up fees to insurers who offer little in return for their loyalty.

Earlier this year the Association of British Insurers (ABI) and the British Insurance Brokers’ Association (BIBA) announced plans to tackle excessive premium differences between long-standing and new customers after it acknowledged vulnerable people were at a disadvantage in the current system.  

Harry Rose, Which? Money Editor, said:


“It is unacceptable that long-standing policyholders are taken for granted by insurance providers and hit by these excessive premiums.