Insurers hit thousands of loyal customers with fees up to €300 higher

Misplaced loyalty has been blamed for the fact that thousands of drivers are paying up to €300 a year too much for their insurance.

he “loyalty premium” continues to be a feature of the motor insurance market despite recent Central Bank rules banning insurers from punishing the loyalty of their customers. 

The Consumers Association has called on the regulator to probe insurance pricing, claiming there is little evidence insurers are following the rules that attempt to clamp down on overcharging long-term customers.

The call came after it emerged that motorists who remain loyal to their insurers are being offered a slightly lower premium this year.

But they could cut the cost of their cover by hundreds of euro by searching for better value in the market, according to Jonathan Hehir of

A comparison analysis of the market he conducted showed the average motorist is paying anywhere between €170 to €300 or more too much for their insurance. Mr Hehir said a mixture of apathy and misplaced loyalty to an insurer is impacting the pockets of Irish motorists.

“We took three average driver profiles and looked at the quotes offered to them by five different providers.

“What the figures show is that no one insurer is consistently the cheapest or most expensive.”

He said in one case, a motorist was quoted €656 by one insurer, but had they shopped around they would have been able to secure the same cover for €344.

Mr Hehir said figuring out the pricing systems of insurers is nigh on impossible.

Some insurers favour older drivers, some favour couples, some diesel, some petrol, while others specialise in higher risk, he said.

“Motor insurance is one of the most fragmented products out there when it comes to pricing and quotes can vary wildly from person to person, and insurer to insurer.”

He said there was no way an average driver could know which provider will offer them the best deal without getting several different quotes from which they can compare.

“Shopping around is still as relevant as ever when it comes to getting the best deal on the market, particularly given so many of us are squeezed financially due to the cost-of-living crisis.”

A recent Central Bank of Ireland survey found that around one in four home and car insurance customers believe loyalty to an existing provider will be rewarded.

“We see it too often that motorists who have remained loyal to one insurer are invariably being offered a slightly lower premium this year and, thinking they are doing really well, are simply accepting it.

“However, if they went elsewhere, they could save hundreds more.”

Shopping around for insurance will become even more important this year as motor insurance premiums could rise due to the huge increases in the cost of car parts and repairs. 

It is only a matter of time before the higher car repair costs trickle down to insurance, Mr Hehir said. 

The Consumers Association has accused insurers of flouting Central Bank rules banning them from punishing the loyalty of customers, claiming that insurers are not properly observing the rules.

The ban on punishing loyalty came into effect last summer. It is designed to stop only new customers getting the best rates. 

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 wants the Central Bank a probe of the insurance industry.

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