Insurers accused of flouting Central Bank’s rules on homes premiums

Home insurers have been accused of flouting Central Bank rules banning them from punishing the loyalty of customers as prices for home cover continue to rise.

he Consumers Association has called on the regulator to probe insurance pricing, claiming there is no justification for the increases in the cost of premiums.

The latest Central Statistics Office figures show that home insurance premiums are up 12pc in the past year despite a ban on insurance companies punishing customers who are loyal to them with higher renewal charges.

The move, that came into effect last summer, is designed to stop only new customers getting the best rates, but is needed to ensure the market is fairer, the Central Bank said.

The ban is on so-called price walking, where customers are stealthily charged more each year they stay with the same insurer, instead of being rewarded.

Chairman of the Consumers Association Michael Kilcoyne called on the Central Bank to probe the industry.

He said payouts by insurers on homes policies were relatively low compared with motor policies, yet premiums were rising sharply.

“Are they using the profits from home insurance to subsidise other parts of their businesses?” he said. 

“There is a suspicion they are flouting the ban on price walking, which is designed to stop insurers punishing loyalty by raising premiums every year.”

A number of consumers have contacted the  Irish Independent to point out that their renewal premiums have sp iked. 

They claim the rule changes that banned price-discriminating price walking do not seem to be having any impact.

One Aviva consumer wrote: “The annual cost of our home insurance shot up from €306.22 in January 2022 to €457.15 this year.

“That’s an increase of €150, which included new key cover €12.

“That is utterly profiteering with no rationale at all.

 There were no claims on the policy, nothing to increase the cover.

“I thought insurance companies now have to offer existing customers any special deals for new customers?”

Others have complained that claimed discounts their insurers insist are being applied to their policies to reflect their loyalty did not bring down the cost of cover.

An Allianz customer said they could get a better deal by applying as a new customer.

Aviva responded that a customer’s renewal price may increase for a number of reasons as there are a range of factors which determine the price of their insurance cover.

“Over the last number of years we have seen increased home insurance claims in areas like fire and escape of water,” a spokesperson said. 

“We have also seen very significant inflation in rebuilding costs, particularly in the last 12 months. Reinsurance costs are also at an all-time high.”

Allianz said that in line with the Central Bank rules on dual pricing, all new customers who go online for their quote currently receive a 15pc introductory discount. 

This is for new customers only and the introductory discount is not available for renewing customers, it said.

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