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Urgent action needed to prevent people with mental health problems paying 'sky high' insurance prices, says charity
Urgent action is needed from the financial watchdog to prevent vulnerable people from being overcharged for insurance products. Charity the Money and Mental Health Policy Institute (MMHPI), which was set-up by MoneySavingExpert.com founder Martin Lewis, has issued the calls after finding people with mental health problems are being charged 27 times more for insurance than non-sufferers.

Martin Lewis, founder of the Money and Mental Health Policy Institute charity and consumer website MoneySavingExpert.com, said: "Insurers have always profited from a grey fog of confusion that covers their prices. With each person often getting a bespoke quote, it creates an easy breeding ground for discrimination, and it is tough for any individual to be able to prove they have been harshly treated.
"The injustice behind that is heightened when the people who may be facing unfair discrimination are vulnerable. That’s why Money and Mental Health’s research is so important – to gather wide scale data which indicates those with mental health issues are sometimes being penalised, unfairly, possibly illegally, and resulting in them paying extortionate prices.
"The regulator has already taken action to stop existing insurance customers being discriminated against, by having to pay more than new customers. So now we’re loudly calling on it to ensure firms obey their duty to consumers with mental health conditions and treat them fairly.”
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."
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