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Compare The Market home insurance deals 'could result in higher premiums'

Clauses in many of comparison site Compare The Market's contracts with home insurers could lead to consumers being hit with higher premiums, the competition watchdog has found.

The Competition and Markets Authority (CMA) says it has investigated clauses used by the comparison site in its contracts, which stop home insurers from offering lower prices on rival sites and other channels.

The watchdog has provisionally found that these clauses break competition law and could be causing customers to miss out on better home insurance deals.

See our Cheap Home Insurance guide for ways to cut costs.

Why do the clauses push up prices?

The clauses prevent rival comparison sites from trying to win home insurance customers by offering cheaper prices than Compare The Market.

It also means home insurance companies are more likely to pay higher commission rates to other comparison sites, with these extra costs potentially being passed on to customers.

What action will the CMA take?

Today, the CMA has issued Compare The Market a "statement of objections", which sets out its provisional view that the contracts break competition law.

The company will now have an opportunity to respond in detail and the CMA will consider the response and any further evidence before reaching a final decision.

What does the CMA say?

CMA chief executive Andrea Coscelli said: "Over 20 million UK households have home insurance and more than 60% of new policies are found on price comparison sites. Therefore it's crucial that these companies are able to offer customers their best possible deals.

"Our investigation has provisionally found that Compare The Market has broken the law by preventing home insurers from offering lower prices elsewhere. This could result in people paying higher premiums than they need to."

What does Compare The Market say?

A spokesperson said: "We are disappointed by the CMA's provisional findings.

"We will carefully review the evidence once we have access to it, and look forward to working with the CMA over the coming months to ensure a satisfactory outcome."

Compare The Market also says it has stopped using the contracts in question.

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