Escalating Direct Line Buildings Insurance Premiums - any experience?

Roy1234 · 28 August 2009 at 9:00PM

Last year, after tiring of my ten year Direct Line Buildings Insurance policy (which I have never claimed on) getting appreciably dearer each year, I put my exact same details into their website as a 'new' customer, and was stunned to be offered identical cover for almost half the price! After ringing up and protesting about this rip-off, they very reluctantly matched the new lower price.

This year, my premium has almost doubled back up to where it was, of course with no claims meanwhile. A friend at work had an identical experience re getting an online quote on his (or his neighbour's) house for half as much, but they wouldn't haggle much with him, and he went elsewhere in disgust.

Does anyone know 'what their game is'? This is getting tiresome. Or are all Insurers punishing loyalty just as badly?

mattymoo · 28 August 2009 at 9:04PM

They are trying to buy growth by offering inducements to new customers - typically 20% if you go online plus a 20% introductory discount. They then rely on customer inertia at renewal time.

A lot of insurers play this game. Some are old school though. If you qualify look at the Hiscox mid-net worth products. Premium is comparable when you up the excess to £250 (compared to £50) but the service is gold plated. My renewal of around £400 (buildings and contents) was only up £8 from last years premium.

Roy1234 · 28 August 2009 at 9:11PM

My DirectLine renewal for a 'bog standard' two bed semi, including buildings accidental damage (which some advisor on the radio once recommended) and legal advice/protection, is £273. Does this sound high?

You're right about the new customer incentives. Last year, they were quite bitter about matching the online special offer aspect for a boring old customer.

mattymoo · 28 August 2009 at 9:24PM

Roy, the biggest rating factors for home insurance are 1) past claims, 2) postcode and 3) your occupation iirc. Its impossible for someone else to say if the £273 is in the right area. The only way to be sure is to phone around for quotes or use a comparison website.

If you use the latter, be aware that the headline cheap prices will often exclude accidental damage, legal expenses cover and may even have an increased excess. Be sure to compare apples with apples in other words.

As for DL's attitude, stuff them. If they rewarded loyalty then customers wouldn't feel the need to play the lapse / set up as a new customer game with them.

Try and get quotes from Co-op and NFU. Both firms have a good reputation for customer fairness. They may not be the cheapest but service is good and I don't think they will be as prone to premium fluctuations as those firms that try to buy the new business in.

Roy1234 · 28 August 2009 at 10:14PM

Thanks for the advice. I do take your point re 'cheapest may not be best'. I don't mind paying for quality, but what narked me about DL was annual rises of 10-15%, there never seemed to be years when it hardly changed much. I will look at the others you mention.

Just as an aside, if I change Buildings cover, will my mortgage provider automatically know? They're an RBS company too, and have the right to autoinsure you at your own expense (if you let cover lapse) with....DL!

mattymoo · 28 August 2009 at 11:54PM

I would suspect DL will notifiy your lender that cover has lapsed. The lender will write to you asking for confirmation that alternative, suitable cover is in place. When I did this I simply sent my lender a copy of the schedule and they were happy with this.

PS: Try and keep buildings cover and contents together with the same firm. There are some savings to be made by splitting them but quite a few people have found that there can be cracks in the cover if you do this. For instance, there can be variations in how insurers define contents / buildings. Laminate floors and built in units are the common problem. One insurer calls them buildings so refers you to the buildings insurer. Their definitions says they are contents so you get passed back again. At least with the same insurer you know the cover will be there.

Roy1234 · 31 August 2009 at 3:18PM

Well, taking some of the kind advice here, I checked out Coop Insurance, which seemed to come in around £155 against DL's £273 for as similar cover as I could make out.

Putting myself back in DL's website for a new customer quote I got £203, so I rang DL to query the renewal price jump (£273 vs £171 last year) and was soon transferred to the 'Customer Loyalty dept' - loyalty being something I presume is considered after issuing a renewal quote, not before.

Mentioning these same quotes, the guy enquired if they were similar terms and then offered me £173 'to stay competitive with the market', which I accepted.

So, £100 instant discount for a low-key, 5 minute enquiry. Or to put it another way, they raised my renewal premium by 59% just to see if I would take it, for a second year running.

It's common to see TV documentaries showing the dishonesty of insurance claimants, and following the investigators tracking them down. But can anyone tell me how this kind of stunt is any better than the guy who exaggerates his insurance claim?

alanwsg · 31 August 2009 at 3:59PM

Hmmm .....

I've just had my renewal from DL at £436 for B+C insurance.
Last year it was £355
Requesting a new quote from their web site gets me £288
Best offer from confused.com was similar (£283 from homeinsure)

What do you think is the best action?
Phone them and ask for the lower rate or just cancel and re-apply?

chopperharris · 31 August 2009 at 4:07PM

dl more than halved all my premiums , hnc , car and travel...but then again i only joined them this year and put them all in once company.

The halved the best rates on the compare sites , which they arent on.

And were a third of aviva.

Will keep an eye out come renewal time thanks for the heads up

Roy1234 · 31 August 2009 at 4:18PM

alanwsg - I've proved two years running that you can knock a fortune off DL's renewal quotes. Get an online quote for your or neighbour's address ensuring all terms (especially excesses) are the same. I suggest you 'save quote', last year they wanted to look at it, this year they didn't bother.

This year, the lower competitor quote (again unproven/checked) heavily influenced them to drop to below even their own online figure. Beware any BS about 'online customers get best rates', there's no better customer than an existing one with a good record, whatever they tell you.

No need to cancel, get the quotes, ring up, I didn't need to even play my face this year. People complaining must be so common, they'll just knock it down then & there. Post back with how much you saved off the robbers. Once upon a time, they punished you 'somewhat' for not swapping insurer, now it feels like they mug you.

alanwsg · 1 September 2009 at 10:45AM

I phoned DL and told them about the quote I got from their web site.
They simply cancelled the auto-renewal and told me to buy it on-line which was easy to do as their site saves all the details.
I chose to lower the excess on the policy and paid £315, so that's £40 less than last year with improved cover, can't really complain about that.

Shame they try and catch you out though, but I guess business is business.

Escalating Direct Line Buildings Insurance Premiums - any experience?

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