Escalating Direct Line Buildings Insurance Premiums - any experience?

Roy1234

alanswg - glad you've saved some money.

But I have to say, I don't agree 'business is business'. Many older/less internet aware customers will get caught out by 'try on' price rises, and just pay up. Seen in this light, it seems far from acceptable to me.

dacouch

Roy without the people who renew each year at the invited premium DL (And other Insurers with the same business models) then the savvy people like you would not get such big discounts off their premium as the people that keep renewing without querying are subsidising your premium

Roy1234

dacouch - yes this is true, I've never doubted it. But once upon a time, large blue chip companies did not behave like this. Now, they almost all do, the magic error being to stay with any firm too long.

From my perspective, I've known older people (from a more trusting time) who really did assume honesty from such companies. They end up paying a high price for their age and more respectful ways and get repeatedly ripped off.

I don't like the guys who knock on such peoples doors offering some rip-off deal, and neither do I like the big companies who've thrown their ethics out of the window too.

dacouch

It used to be that existing customers got cheaper prices as the Insurers knew their history and there was less work involved as they simply renewed so no admin work in setting up the policy. I much prefered it then as it was more transparent and fairer for everyone.

Your right about the older people who tend to keep renewing, they have a disadvantage on most services they buy as a large percentage of them do not have internet access so cannot obtain the best deals on most of the things they need

It also has the effect of commmoditising Insurance so people end up shopping on price alone without ensuring the policy is suitable and the Insurer a decent company.

Roy1234

Yes I agree. Bring back the old days, when customers stayed put with trusting/trustworthy companies who valued loyalty.

You're right about price and policies, the small print question is one which can still catch out even young, informed people, whilst the increasingly widespread stories of bad conduct from companies at 'claim time', adds yet another unquantifiable to your choice.

I'm afraid it's a trashy world we live in now.

dacouch

The comparison sites are having a big effect as people will only buy the cheapest policy on the screen so to get their quote to the top they have to strip out cover and cut back on staff which inevitably has an effect on claims.

I'm a broker and before the advent of comparison sites people would contact a broker and the broker would recommend a company based on a combination of good cover and the price. Insurers had to offer a good policy and good service or they would not get the business failing that the companies with bad cover / service would target the markets no one else wanted eg young drivers or bad convictions etc.

Car Insurance offers very little profit for an Insurer so they tend to go for volumes of business. It strikes me that car insurance is going through a transition period, in the long run some companies will still sell based on price alone whilst overs will target the people who are more choosey or who have had their fingers burned and offer a superior service and cover for an increase in premium. More Than seem to be trying this at the moment and no doubt over Insurers will start to copy their lead

Roy1234

dacouch - I read your reply with interest, especially as you say you're a broker.

I'm the kind of customer who happily pays for quality (Granny was right - 'best is cheapest in the long run') and follow this policy with most physical stuff I buy. The trouble is that insurance is intangible, the legal aspects defy most peoples understanding or patience, whilst the competence & fairness at claim time is another unknown quantity.

Googling various famous name insurers for reviews, I was surprised at the vitriol poured upon most I found. Admittedly, those with bad experiences may post more often than the happy majority, but some stories are still unsettling. The use of third party claim handlers crops up again & again as a cause of annoyance with those using various famous name insurers who 'thought they were with some known/trustworthy company' but feel passed down the line to some less pleasant bunch of people at claim time.

So with insurance so intangible, how do I know if I'm paying for quality and not simply being scammed by some company? Is the extra cost for better cover, or am I just being had?

With this in mind, I'd appreciate your professional opinion on what companies stand out as quality worth paying for in one or both of the Buildings and Contents fields?

Following on from that, my few year old RAC contents insurance policy (inc £3.5k of jewellery away from home, without demands for extensive pre-listing of items) has jumped this year from £169 to £220 (30%). Unlike DL, they will not budge a penny on price despite two attempts with quotes from others, these generally coming in around £160ish. RAC claim that they've raised their prices earlier than most this year, but that the others will follow later. Is this true? I believe they are effectively Norwich Union rebranded, if that's so NU wanted even more at £250 for similar cover which could explain the origins of the rise.

Is this RAC policy 'quality worth paying for' or just another DL trick?

dacouch

The RAC policy is not to bad a policy, as you have noted its basically an Aviva policy.

I found it quote amusing when I had a look at their Policy Summary, may be they have been brought out by Sheila's Wheels... http://www.rac.co.uk/library/pdfs/RHDCB2057_06_07_VERSION.pdf

With regard to companies I would recommend then obviously Hiscox or Chubb although they may be out of your league price wise.

I like Aviva although I would not really recommend you deal with them direct, they do have a habit of messing things up and it can then be difficult to get the matter sorted out. You also have the problem of them getting Asprea involved in a lot of their claims which is an absolute nightmare.

Aviva through a broker is normally ok as if / when they mess up the broker knows they have made a mistake so sorts it out or if its a mess up at their end they can simply make a phone call to a senior person and get it sorted out there and then.

You will find most brokers have traditionally placed their car insurance with General Accident and then Aviva (NU) when they took over them. The percentage is reducing now but it is still a significant percentage.

The examples you give of outsorcing claims and the like are caused by Insurers trying to cut costs to get themselves to the top of the comparison sites.

I must admit I used to hate DL (All brokers do / did as they were the first proper direct company that was a threat to them). Now days I must admit that they do get a lot of things right, they have kept their call centres in the UK and give pretty good cover for a fair price.

Have you looked at combining your Building and Contents with DL, they are offering some good deals especially on their Home Insurance Plus which is basically an enhanced version of their standard policy. They seem to be pricing it to attract business at the moment and are throwing in some extras such as annual european travel cover. It might be worth running a quote through on their website and then ringing them to say you have x price on their website for a building and contents what can they offer you.

CIS and NFU are also pretty good, I would recommend you avoid any NIG, MMA or Axa (Including Swiftcover) policies

You are very right in stating Insurance is an intangible thing, its basically a piece of paper that you do not know the value of until you make a claim. This is basically how we explain to customers why sometimes its best to pay a little more for a better company, after all you are in effect buying peace of mind and want it to do what it says it will if you ever need to claim on it.

Roy1234

dacouch - thanks for the informative reply. Just one thing you didn't touch upon, do you consider RAC's 30% price rise a genuine reflection of the market (i.e. fair) or a daft attempt to boost profits?

I will look at Hiscox (haven't heard of Chubb as an insurer before), they seem to advertise themselves heavily as being higher quality (and presumably higher price) insurance.

After reading the endless complaints about Asprea as used by Aviva/NU (/RAC?) I was left wondering if a reputable insurer had been spoiled by a bad claims handler. I'm guessing that RAC cover would risk going via Asprea too?

You menioned DL as a contents insurer, I forgot to mention that they came in around £135, which seemed almost too cheap, and that was before claiming any further discount re being a Buildings customer too. I had started to wonder (after their price hike games) if DL had become a dubious choice, and was wondering if contents insurance (which I've always considered more likely to be claimed upon than buildings) would be a mistake.

Originally I was with AA, then my OH moved in with her £3.5k of jewellery, and the policy/valuations of the AA's became irksome. We then switched to Axa (ironically after my OH's good experiences following a burglary claim, despite your experience). They later quit the contents insurance market and passed us on to RAC, who seemed quite cheap & good. My OH's jewellery tends to exceed standard 'under £2k' type clauses, attracting need for special enquiry or valuations/descriptions to be lodged. I was attracted by the fact Axa, and later RAC, didn't want this hassle and would just settle for the £3.5k total/£2k max single item with just a modest price rise and no fuss.

dacouch

A 30% increase is not in line with the rest of the market, if you take out new customer discounts the prices on home insurance are more likely to be raising by 5% to 10%.

The RAC policy would almost certainly try and refer you to Aspera for building relating damage, you do not have to accept them and as you have seen from MSE it is wise not to use them.

Have a look at the DL Home Plus policy as it has much higher single article limits than their average and most average policies http://www.directline.com/home/homeplussummary.pdf

After deciding the Direct market was not for them and selling their book to the RAC, Axa have now decided to reenter the market, they really do have a lot of issues at the moment so I would recommend you avoid them until they have sorted them out.

If you can afford a Hiscox or Chubb policy then go for it as their cover is far far in excess of a normal Insurers and the claims service is exactly how you would expect your perfect claims service to be. They cater for the higher end of the market and their premiums reflect this, as your Granny advised you quality costs.

This survey may help you (Its of brokers so does not take into account direct only companies and is slanted towards commercial insurance) http://www.insurancetimes.co.uk/images/ITW_041208_16.pdf