State Owned Banks Overcharge for Their Insurance Products

Daily Mail has presented its research findings on insurance products offered by state owned banks in the UK. It turns out that the banks which have been bailed out by tax-payers ask for their insurance products much more than on-line providers and insurance brokers. Such companies as Lloyds Banking Group and RBS/Natwest offer home, travel and car insurance at extremely high rates.

The data does not surprise one of the leading van insurance companies in the country, Staveley Head. A representative says that for many years the price of the insurance sold by banks has been much higher than the market rate. These financial institutions take advantage of the situation when their customers come for a car loan or a mortgage. Bank managers offer insurance and the clients feel that if they decline the deal they will not receive the loan they need.

Money editor at Which?, James Daley believes that one of the reasons why bank insurance products are so expensive is that banks are very dependant on their clients’ current accounts. So, you might be offered a very good rate for the first year but then it will go up.