Insurer Direct Line has called for a government ban on "switching fees" - fees imposed when a mortgage customer chooses to arrange their home insurance with someone other than their mortgage provider.
The Surry-based company said these fees discouraged consumers from shopping around for the best value home insurance and were costing homebuyers over £330m each year.
In a statement, the company said: "Unless the government intervenes, well over two million homebuyers will continue to be unfairly penalised, either for simply choosing to arrange their cover with someone other than their mortgage provider or through the continuing practice of tying-in discounted mortgages with expensive insurance deals."
It added that it was also calling for a comprehensive review of prevailing market practices that were designed to discourage consumers from shopping around for best value.
Direct Line said research in its new "Home Insurance Report" showed that at least 22% of the mortgage market was controlled by lenders who still charged switching fees.
It added that cover arranged through a mortgage provider was often as much as 30% more expensive than cover arranged directly.
It said this, coupled with other anti-consumer practices, combined to potentially discourage over 2.2m homebuyers from seeking out a better deal on their home insurance.
Direct Line home insurance business manager Malcolm Cooper said: "Through the publication of this report we will be urging the Government, opinion formers and regulatory bodies to intervene in order to ensure that in future, consumers are free to act in their own best interests without fear of prejudice or penalty in order to obtain a better deal."
