Home Insurance Question

Nyla1979

Hi everyone, I was just wondering if you could tell me if this is the norm or not please...

Before finding MSE my hubby and I just used to go with the flow for insurance. At the moment we are with Lloyds TSB for our buildings and contents (which they then passed on to two different companies, one for buildings, and one for contents)

Anyway, we had a letter today to say our contents insurance is up for renewal in Feb, so I decided to look at some new quotes (via Quidco of course!) and they are coming out at cheaper than what we are paying for the contents alone at the moment, and that's without the buildings insurance on top!

What I was wondering is, is it usual for there to be such a difference in price, or have I missed something major on the quote pages??!!



Thank you!

mattymoo

Insurance goes in cycles that are roughly 10 yrs in duration. At the moment we are in the soft market part of the cycle. Firms see money to be made and will lower their premiums to buy in new business. They then rely on people not shopping around at renewal and will increase the rates. In addition, some firms like Direct Line offer 10-20% discount for taking out a policy. Fine for year 1 but it then looks like a large rise in premium in year 2 when in fact you are simply not getting the discount. This is why you really need to shop around each year.

The hard market cycle comes when firms start to lose money, increase their rates or exit the market. Its the laws of supply and demand. The remaining firms can then start to name their price.

This happened 2002 - 2004 when employers liability premiums went up 10 fold in some cases because of problems with historical asbestos claims, 9/11 and the collapse of Independent Insurance.

PS: It is always better to have contents / buildings with the same firm. Avoids arguments over what is contents / buildings and also means only one loss adjuster needs to be appointed to handle any major claim.

Nyla1979

Thank you hugely for the reply, we will definitely be switching insurance companies next month!