DRIVERS and homeowners who pay their insurance monthly are now being ripped off by hundreds of pounds annually.
Britain's biggest insurers have pocketed a minimum of lb500million annually from 7.6million motorists and eight million homeowners who pay the fee.
Customers who cannot afford an annual policy in a single lump sum are inspired to pay a premium on monthly instalments.
But insurers treat the premium like a loan and charge rates of interest as high as 45 percent on the repayments.
Some clients are charged lb300 a lot more than if they had paid all at once.
The Daily Mail found the practice netted three firms – Direct Line, Esure and Hastings – lb122.5million within the first six months of this year.
Aviva, Legal & General and RSA refused to state the things they earn.
Campaigners Fairer Finance labelled it “a tax around the poor”.
Worst hit are likely to be older homeowners on tight budgets and younger drivers who have higher premiums and fewer spare cash.