Homeowners 'lose out on insurance' by not shopping around

Posted : 17-05-2007

Homeowners are paying almost £1 billion too much for their home insurance - because they are taking out policies with their mortgage providers instead of shopping around.

New research from the Post Office warned that eight million people are paying more than they need to, with 60 per cent of households standing to save around £90 a year by taking out a different policy.

The study found that one in ten buyers believe that it is compulsory to take out their mortgage provider's insurance, while one in 20 think that their mortgage might be in danger if they do not take it out.

The majority of buyers, however, admitted that they do not shop around because getting all their financial products from one provider is "convenient".

"Many homeowners don't realise taking out buildings and contents insurance with their mortgage lender is generally not the best value deal. And it's not compulsory for securing their mortgage," said Phil Ashkuri, Post Office Financial Services' head of insurance.

He added: "Our advice is shop around as there are better home insurance deals out there from standalone providers."


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