Several long-time homeowner’s insurance clients have been unaware that they have been paying more than what insurance neophytes have been paying. You must compare for insurance coverage limits and plans if you are not doing yet. It has been reported that some who have stayed for more than five years in an insurance policy are paying more than those who have been starting out or changing insurance companies annually.
Several research firms in the UK have been monitoring the performance of insurance companies in their relation to their customer policies. It has been discovered that loyal customers, who have continuously paid a specific insurance policy, has been integrated to loyalty premium where they would have paid twice than the price of the policy when they started.
Several insurance watch agencies have also accused insurance agencies of monetizing their long-term clients to premium homeowner’s insurance policies, which have even failed to notify some of them. No one can imagine the shock on their faces when they saw their insurance bills that were already way higher than what they used to pay.
The analysis made by Citizens Advice have shown data concerning the imposition of these ‘penalties’ that had skyrocketed their homeowner’s insurance policies by almost 500% of what they have usually paid. The study had hypothesized that these prices increase during the inflation season unless an insurance switch has been made. It has been observed how the loyalty of these insurance customers made them pay £325 average annual premium, once they surpassed the fifth year of their policy, starting on their sixth year. However, considerations were also made in the study as there are other factors that can affect the increase. Nonetheless, most of the organizations who have conducted the study, especially Citizens Advice, believed that these customers are being monetized by these companies through the premium during the sixth year of their policy.
It has also been noticed that most insurance customers targeted on these ‘loyalty premium’ were those who were beyond sixty-five years old, those who depend on their pensions, and those who were handicapped. Citizens Advice have observed in 2016 the number of six-year tenure insurance policies were 9.3 million, while those who regularly or casually switch insurance policies every year were 6.9 million. Those who belonged to the previous statistical range were those who belong to the minority of elderly and physically-challenged individuals. The organization has deemed these minority as vulnerable to this ‘penalties’ for being loyal to their insurance providers.
As the study has been finished, Citizens Advice had drafted a super-complaint on the absurd charges and penalties to insurance companies to Competition and Markets Authority (CMA). The complaint submitted contained the study and the ‘damaging practices’ that were observed that could create an abusive environment, especially to the vulnerable minorities. As far as the study had shown, the most loyal customers on their homeowner’s insurance and all other insurances were those considered elderly and physically-challenged.
While the competition on the insurance services was hot at the moment, there is still a need to create an ethical practice for insurance companies on their loyal customers or they would continually encourage customers to change policies from time to time.