People’s lives change all the time which is why TSB has launched a new service to free trapped home insurance customers
On Monday 26 June, TSB launched a new service that will help free people who feel trapped by their current home insurance provider. If a new TSB customer is charged a fee by their previous insurer for cancelling their old policy ahead of their annual
renewal, TSB will refund that fee, up to the value of £100, so customers aren’t penalised just for getting an insurance product that better suits their needs.
TSB knows that people’s lives change throughout the course of the year and their home insurance needs to keep pace with these changes. Whether it’s having some building work done, moving in with a partner or launching a business from home – when things change consumers need to be free to shop around to get the best
deal for their needs.
But TSB has discovered that people are feeling punished by many home insurance providers who charge a fee if they make a change or cancel their policy outside of their annual renewal. Seven of the top 10 home insurance providers in the UK charge a cancellation fee, costing around £22 on average.
The extent of the problem...
With nearly 21 million home insurance policies thought to be in force in the UK, this unfair practice is potentially costing consumers over £25 million each year1. And that’s just the fees customers who go on to switch are paying. Other people will be missing out on potential
savings because they, understandably, don’t want to pay a cancellation fee – and are then effectively trapped with their existing provider and a policy that no longer meets their needs.
Kat Robinson, TSB’s Head of
General Insurance, says: “I was disappointed to discover just how many of the UK’s biggest insurance providers are charging customers for shopping around, especially when people’s circumstances change and it’s really important that they have the right insurance for them.
“For any market to operate well consumers must be free to shop around to get the best deal for their needs – yet this practice is costing people over £25 million every year.
“TSB doesn’t charge cancellation fees on our home insurance products, and we also don’t charge customers if they want to make changes to their policy ‘mid-term’ because their situation changes. As Britain’s challenger bank we’re trying to do something different to help make the home
insurance market work in the interest of consumers. I’m delighted to be launching TSB’s new cancellation fee refund service to help free consumers who feel trapped by their existing provider and ensure they aren’t left out of pocket when they switch to us.”
TSB believes that consumers must be able to shop around for a good home insurance deal – without ever being charged a cancellation fee. That’s why TSB doesn’t charge any cancellation fees on its home insurance products. And now if a customer who switches to TSB
incurs a fee for cancelling their old policy, TSB will refund that fee, up to the value of £100.
TSB previously called on politicians to sign-up to its Consumers Matter Manifesto and adopt three principles to get consumers a better deal and create a stronger economy that works for everyone.
Some of the UK’s most important markets – such as energy, telecoms, banking and insurance – are not working for consumers. That’s why TSB is calling on the Government to pledge three simple principles which will help make the industries people value the most, work in their interest:
- Ensure consumers know what they are getting.
- Let consumers shop around freely.
- Enable consumers to vote with their feet and switch easily.
TSB believes it’s time for change, and for consumers, not businesses, to be put at the centre of the industries that people value the most. This will not only be good for individual consumers, it will be good for the whole economy.
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Notes to editors
1 TSB internal analysis based on industry data considering home insurance policies in the market, average cancellation fee and proportion of customers who switch their policies.