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Citizens Advice has announced that it is "happy" to hear that the Financial Conduct Authority (FCA) has responded to the complaint it submitted in 2018 about customers being affected by a "loyalty penalty" on their home insurance policies.
“It’s great to see the FCA acknowledging that the insurance market isn’t working for consumers and pledging to crack down on the loyalty penalty," said Citizens Advice's chief executive Gillian Guy.
“We’re especially happy to hear the regulator say that everything is on the table to make sure customers are getting a fair deal."
One case Citizens Advice highlighted was Paul from Staffordshire. His mother-in-law was being charged £800 a year for home and contents insurance on a small mid-terraced house.
“She is an 89-year-old lady and doesn’t have the capacity to sort all of that out herself. I feel like she’s been cheated. And I think it seems like common practice, to rip off the people who are most vulnerable," Paul told the charity.
Here's an infographic based on data from the Competition and Markets Authority.
It shows the scale of how much money UK consumers are losing each year due to providers getting existing customers to pay more money if they decide to stick with a service once a deal ends, instead of switching to a new provider.
The FCA has proposed a series of measures to address the problems it has identified with competition in the UK home and motor insurance market.
A consultation will be held on the remedies and a final report published in the first quarter of 2020.
These remedies include:
The Financial Conduct Authority (FCA) has published a market study into the pricing of home and motor insurance, and it has concluded that around six million policyholders pay high prices and are not getting a good deal on their insurance.
The FCA found that:
Work carried out at Thatcham Research in Berkshire has helped to save more than 15,000 lives.