Urgent action needed to prevent people with mental health problems paying 'sky high' insurance prices, says charity

As well as pricier insurance premiums, the MMHPI says mental health sufferers are also being offered reduced cover or are being refused insurance altogether — sometimes even when their conditions are stable and manageable. 

Those impacted are then often left unable to afford insurance and more likely to go without cover, the charity warns. It adds that is also concerned some firms may be breaking the law by discriminating against those with mental health problems.

The charity, along with its founder Martin Lewis, are now calling on regulator the Financial Conduct Authority (FCA) to investigate whether people with mental health problems are being treated unfairly by insurance firms - and asking it to punish those firms that do. 

In addition, the MMHPI want the FCA to set out specific expectations for the industry around how firms can provide fair value for customers with mental health problems, particularly where cover excludes their mental health. The charity is also urging insurance providers to be more transparent about how decisions are made. 

People with mental health problems are paying a higher price for insurance

The research by the MMHPI looked at 15 travel insurance providers to see how disclosing a mental health condition would impact the insurance offered. Further surveys found issues to be common across the insurance industry, and not just associated with travel insurance. Key findings include:

• Premiums that jump dramatically in price when customers disclose a mental health problem. The research found that those suffering with severe depression were being charged three times more than someone without. This jumped to around 27 times more for someone suffering with bipolar. 

• Insurers excluding mental health conditions from their cover, without reducing prices. The research found that five of the 15 insurance firms included exclusions for mental health conditions, without reducing the price of the insurance product. This means people pay the same price for insurance products as non-sufferers, but are not covered for claims related to their mental health condition/s. 

• Insurers refusing to offer cover to people with more severe problems. In its research, the MMHPI found nine out of 15 firms refused to insure a customer with severe bipolar disorder. This means many people with severe mental health conditions will not be able to access vital insurance.

What does the FCA say?

An FCA spokesperson said: "Firms are required to assure themselves, and us, that their pricing is not discriminatory, and they must not use data in a way that could lead to unlawful discrimination based on protected characteristics, in line with the Equality Act. We have taken action where we’ve had concerns with firms’ practices. We take any reports of customers being treated unfairly seriously and will take action where appropriate."