Societies overcharge for cover, says AA

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The Independent Online
HOME OWNERS are paying up to 55 per cent more than they need for buildings insurance and 25 per cent over market rates for contents insurance, according to a survey of top building societies by the AA.

Average society premiums for buildings were £189.36, compared with an average of £136.59 charged by a range of 24 insurance companies. In one instance, a householder in Wigan was quoted an average premium of £110.51 to cover his home by the insurance companies against an average quote of £170.87 from the building societies.

The average quote for contents cover by the insurance companies was £104.42, compared with an average from the building societies of £130.25.

Many of the building societies have recently announced that they are bringing their rates down, according to Mark Wood, the managing director of AA Insurance.

"But with insurance companies offering far more competitive rates and adding attractive deals to encourage customers to `unbundle' their cover from the mortgage providers, there seems little logic in anyone leaving their insurance with their building society," he said.