New research from Gocompare.com has revealed that a significant number of people buying their home insurance from their mortgage lender said that they felt pressured to do so.
According to the survey, over 20% of homeowners bought their current home insurance from their mortgage lender. Of them, 12% said that they felt under pressure or believed that buying the insurance was compulsory. Just 19% said they bought the cover because they thought it was value for money with two thirds saying they bought it simply because it was convenient.
In a statement Gocompare.com has announced that the mortgage lenders will generally provide insurance from one company, so it’s unlikely that theirs will be the most competitive policy. Homeowners should shop around for both their building and contents insurance – the difference in premiums between insurers can be quite significant. However, it’s important to compare policies on the cover they provide, as well as the price.
Hayley Parsons, CEO of Gocompare.com, said: This is a worrying sign. We know that mortgage deals have been harder to secure of late but we really don’t want to go back to the bad old days when customers were often under pressure to buy the lender’s products to help secure the loan.
There can be a danger of pressure selling when margins on the loan itself are so small, but customers need to know that they are under no obligation to buy buildings and contents cover from their lender.