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Strange call with insurance co re B&C renewal
Chinkle
Posts: 680 Forumite
Called my insurer to review/renew our insurance cover and was surprised about the responses to some of my questions and therefore wanted to know what you think:
Buildings cover – sum assured: asked how they have derived this, oh it’s the minimum amount of cover we require of everyone. “Regardless of house size/type” I asked? “Yes” was the reply. Now the amount is £500K which is a good deal more than the average house price in the UK let alone rebuild cost – so theoretically most people with this insurer will be over-insured for rebuild.
Contents cover – again I am told that there are minimum amounts for theft from garages/outbuildings of £1,000 and £5,000 per item for valuables and £5,000 per item for entertainment items even if we don’t need that cover.
Does this sound strange to you? Please don’t reply just to say move elsewhere, as I have done price comparison sites and this is still the cheapest cover for us, just want an opinion as to whether this sounds right – I didn’t have a great deal of confidence in the person at the call centre to a number of my questions.
Buildings cover – sum assured: asked how they have derived this, oh it’s the minimum amount of cover we require of everyone. “Regardless of house size/type” I asked? “Yes” was the reply. Now the amount is £500K which is a good deal more than the average house price in the UK let alone rebuild cost – so theoretically most people with this insurer will be over-insured for rebuild.
Contents cover – again I am told that there are minimum amounts for theft from garages/outbuildings of £1,000 and £5,000 per item for valuables and £5,000 per item for entertainment items even if we don’t need that cover.
Does this sound strange to you? Please don’t reply just to say move elsewhere, as I have done price comparison sites and this is still the cheapest cover for us, just want an opinion as to whether this sounds right – I didn’t have a great deal of confidence in the person at the call centre to a number of my questions.
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Comments
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It sounds right. They are giving blanket cover "up to" the figures quoted.0
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Do you not think the figure for buildings cover is somewhat high?0
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No .0
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Do you not think the figure for buildings cover is somewhat high?
It is blanket type cover. You are covered up to £500k, but in the event of a total loss claim, they will only pay the rebuild cost, plus other associated fees.
The premium is calculated on the property details i.e. it being a 3 bed detached in postcode xx1 1xx, built in yearxxxx and of standard materials. The Insurers use the RICS guide of rebuilding costs, for average size of properties in the general area, built around the time. From this average rebuild costs from the RICS guide, the Insurers base their premium. So you are paying a premium based on the estimated rebuild cost and not the £500k.The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.0 -
But what would cost more than a total rebuild?
Besides the operator told me the cover is not specific to me but the minimum they cover everyone for regardless of house size/location that's what I found so strange.0 -
The £500,000 isn't your insured amount!
The operator has mislead you. It's the maximum cover provided. So if your house was a total loss and cost £200,000 to rebuild, then that is what they would pay (less any excess of course).
These policies aren't unusual. Don't worry!0 -
But what would cost more than a total rebuild?
Your house may cost £150k to rebuild. Another house may cost £100k or £300k. The insurer are offering a flat premum to cover up to that limit.
Quite normal.Besides the operator told me the cover is not specific to me but the minimum they cover everyone for regardless of house size/location that's what I found so strange.
Thats right. Its cheaper to retail one plan via some distribution channels that fits most people.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Interesting replies, because a number of the comparison websites use RICS estimates of your rebuild cost when provide quotes, so you tailor your policy to suit you. Also, I thought I'd seen here too advice from Martin about ensuring you have the right level of buildings cover as rebuild costs have actually fallen since the credit crunch.0
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Interesting replies, because a number of the comparison websites use RICS estimates of your rebuild cost when provide quotes, so you tailor your policy to suit you. Also, I thought I'd seen here too advice from Martin about ensuring you have the right level of buildings cover as rebuild costs have actually fallen since the credit crunch.
You answered this already!Chinkle wrote:I have done price comparison sites and this is still the cheapest cover for us
And the replies you have been given are all attempts to answer your question:Chinkle wrote:Does this sound strange to you?...........just want an opinion as to whether this sounds right
Time to move on!0 -
Also, I thought I'd seen here too advice from Martin about ensuring you have the right level of buildings cover as rebuild costs have actually fallen since the credit crunch.
Perhaps Martin is referring to those that use the old set insured method.
Both methods have existed for about 20 years now.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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