'Insurance renewals should be forced to include last year’s cost' blog discussion

Former_MSE_Penelope

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Insurance renewals should be forced to include last year’s cost" Blog.

Please click reply to discuss below.

Aguilk

Hi Martin,

Having previously worked for an insurance company (claims department not admin) I know excatly what you mean by this, The real reason behind the hike in your insurance every year is 'inflation' and if it was a new policy the year before then you loose the new customer discount. Often the problem with switching insurer's is that if you do need to make a claim and have had the policy only a short time then the insurance claim will be a very lengthy process and may even leave you out of pocket while the insurer check your claim is not an attempt at fraud!!

When I recieved the quote for my contents insurance renewal it was £3 more every month because of that magic word again 'inflation', increasing costs in building supplies and contractors and that we had made a claim the previous year.

I rang my insurer to point out that the claim made was cancelled as my husband fixed the laptop for less than what the excess was. I also pointed out that as we rent that we would never be using a building contractor under our CONTENTS insurance as the landlors would pay for this so why should I pay for this and as far as 'inflation' goes they can go jump on that one!! and also that we had lost our new customer discount.

After this long discussion they agreed to cancel the policy and quoted a new one at the same price and put it through as a new customer as we had a different policy number.

Another tip for all those looking for the best home insurance deals out there, although your policy states like for like (L4L) or new for old (N4O) you must understand this is based on the specification ONLY and not how much you paid for the item! This is a common misconception. While looking for the best policy out there it is well worth the effort of ringing the insurer and asking if they class the brand as specification as when they are replacing L4L or N4O as many insurer's look for the cheapest model on the market with the same spec, this means you could get an 'emachienes' laptop (or value of) to replace say a Sony Vaio... the price difference could be a good couple of hundred £££'s! Also keep a note of all the model numbers of the important bits in your property and proof that you owned them such as instruction booklets, reciepts or even breakdown cover that is sold with many electrical items, not having this information could leave you worse off as if you have no proof and dont know models numbers or some of the spec of your items then the insurer will only offer the cheapest model on the market!

Sorry I rambled on but having worked in the evil sector I just thought I would share a few bits with you (also if you complain enough they will back down in the majority of situations even if under the policy t & c's you may not be entitled to what you are asking for)

K

tquarter

I have just looked at my house renewal due this month...I run a quote online with the same company - same cover came in £60 cheaper and going through cashback site earned me £50!!! I promptly phoned to cancel my renewal and when I was asked The poor customer service staff-lady just said the renewals couldn't compete with 'new customer' discounts! Go figure!!

jools0001

I'm not sure I agree. Isn't this just a differentiator between people who are price-sensitive and those who aren't?

If nearly everyone suddenly gets moved into the 'price-sensitive' group (by being shown the old/new prices together) there are less discounts to go around for those prepared to look for them, and those who really need them.

The insurance companies will still pursue the same level of profit overall, the difference is whether everyone pays more or some people (who have the luxury of not needing to shop around or haggle) pay more.

JimmyTheWig

jools0001 wrote: »

The insurance companies will still pursue the same level of profit overall, the difference is whether everyone pays more or some people (who have the luxury of not needing to shop around or haggle) pay more.

Same old argument, isn't it, with unfair bank charges, unfair RyanAir charges, etc.
I agree that those of us on the ball enough can get good deals with schemes like this, but it is in no way fair.
What about all of those people who are too busy through work and childcare committments to shop around? What about those who don't have easy access to the internet to shop around? What about those with poor numeracy and literacy skills to help them shop around and find it all too daunting?

If smaller discounts are required to make things fairer, then so be it.

Sowilo_2

My Norwich Union breakdown cover rose 40% one year. Their reason; the car was 5 years old now. Motor insurance with one firm I found rose by nearly 50% over 3 years and contents similar. Changed; breakdown to Green Flag and saved £30 a year, car to different broker but same policy with same underwriter and saved £90, house contents changed insurers and despite having made a claim that year saved 40%.

earthmother

I've had the house (contents only) insurance renewal paperwork through this month - it had gone up by about 13%. We've been with the Pru for several years as so far they've always quoted the best, and every year I can normally halve the premium either by restarting as a new customer (and usually with Quidco too) or haggling.

This year they couldn't even get the haggled figure down to last years premium, and their new customer online quote wasn't much better - but the AA beat them by almost half (for the same cover).

I've always shopped around - years ago it was a day or two spent with the yellow pages, then a wait for quotes to arrive in the post to confirm cover levels - at least now it's minutes online instead

MothballsWallet

I'd also like to see insurers banned from writing to you repeatedly around renewal time - send one letter with the renewal details, then (to quote Penn Jillette) shut the **** up as, to my mind, if I want to renew with them, I will contact them. What's so different and difficult about that?

PHC.CHELT

Hi Martin, we are a firm of Insurance brokers speciailising in private medical insurance. When we send out our annual renewals along with any possible alternatives we also remind clients what they were paying the previous year. There are many factors for the increases, but cutting to the chase its all about what they have had to pay out in the last 12 months, not just for one member like yourself, but for their whole book of business.

Incidentally, i dont know how we would go about prmoting this, but we would be pleased to offer some cash rebate to any of your users who used us to help with the renewal, whether they stay with their current insurer or in fact moved elsewhere. Bascially a win win situation!! Please could you advise as to who i should speak with in the Martin Lews empire!

PHC.CHELT

Hi Martin, one further thought, if you use our service we could save you a further 2.5%!