The UK’s Financial Conduct Authority (FCA) has called for reform of the general insurance add-on market, after a review found consumers being overcharged up to £200 million ($367.89 million) a year for products they may not need or use.

Add-ons are sold alongside goods or services such as cars or holidays, or with other insurance products such as home cover.

The investigation into the £1 billion ($1.83 billion) sector also identified poor competition and low levels of claims.

“There’s a clear case for us to intervene,” Director of Policy, Risk and Research Christopher Woolard said. “Competition in this market is not working well and many consumers are simply not getting value for money.”

Proposed reforms include a ban on pre-ticked boxes, an improved way of offering add-ons through price comparison websites, forced publication of claims ratios and breaking the point-of-sale advantage for guaranteed asset protection (GAP) – usually offered with car sales.

The FCA reviewed purchases by 1000 consumers in the travel, gadget, GAP, home emergency and personal accident add-on insurance markets.

It found 38% of consumers did not plan to buy add-on insurance before the purchase, 69% could not remember how much they paid and 19% could not remember buying it.

The British Insurance Brokers’ Association (BIBA) says the suggested remedies are “sensible first thoughts” that should better protect customers and provide a more level playing field for brokers.

BIBA will informally consult with its members to see how publishing claims ratios may work.