'Bereavement penalty' blamed for premium rises

Shortly after her husband died, Kay Lawley* received renewal quotes from the couple's home and car insurance provider, Ageas. She told the company of his death and was stunned that the quotes then increased by up to 15%.

- Anna Tims

Her car insurance quote went from £301 to £348, while her home and contents policy rose by nearly 12% - from £1,039 to £1,161.

"When I asked why, Ageas was unable to give me any reason other than 'that's what comes up on the screen'," she says.

"I was already the lead name on both policies and nothing else has changed. How can such decisions come at a time when the surviving partner is in no fit state to argue the toss, and also when a household's income is likely to be reduced?"

Newly bereaved customers face paying a premium in their grief as analysts say that many insurers regard a single policyholder as higher risk.

Divorced and separated couples are also affected by this.

The little-known policy is based on algorithms that match individuals to the claims history of customers with similar profiles. Age, profession and marital status can affect pricing, but this bereavement penalty has been denounced as particularly insensitive by customers adjusting to the loss of a partner.

Alison Roper* was informed that her home and buildings insurance would cost more when her husband died.