Before you buy house insurance on price alone read this

ACG

mikey72 wrote: »

How do you know that one company is the best for every individual customer you deal with? Is that even allowed?

I only do it for B&C insurance but yes its perfectly acceptable.

The company i use probably arnt the best for each and every customer but i would put my money on them being a better option than the cheapest. They have 3 levels of cover depending on the customers needs with different excesses etc.

If my clients have better cover or find better cover, ill quite happily hold my hands up but i think in the main the company i use cover the majority of options and for an insurance company have good ethics behind them and release their claim statistics - how many insurance companies do that?

dacouch

mikey72 wrote: »

How do you know that one company is the best for every individual customer you deal with? Is that even allowed?

When I used to do Home Insurance, I placed 80% to 90% of my standard Home Insurance through Legal & General. They gave me a discretionary discount of upto 20% off their premiums (Renewal and New business and they also included an extra 5% discount for renewals).

They had a great policy, very very good claims service, they had a very local office to me, ran by proper knowledgable staff.

My customers bought on service, cover and price (Price not being as important as the first two).

I had a very substantial account, increased commission and could speak to someone who would sort out problems instantly.

Due to the nature of my clients, L&G were making a profit of circa 40% after claims but not before their expenses.

They would do things for my customers that any other Insurer would refuse. They would also pay claims that were not technically covered, but would call me and ask me whether I wanted the claim settled. For instance, a client's daughter was groomed by a !!!!!, her computer was ceased as evidence by the police, who subsequently destroyed it by mistake. The police would not pay for the computer (This was some years ago when computers cost circa £900). It was not covered by L&G, they rang me as they felt morally it would be good to pay the claim so they did. This would not be paid by any other Insurer except possibly Hiscox or Chubb.

dacouch

ACG wrote: »

I only do it for B&C insurance but yes its perfectly acceptable.

The company i use probably arnt the best for each and every customer but i would put my money on them being a better option than the cheapest. They have 3 levels of cover depending on the customers needs with different excesses etc.

If my clients have better cover or find better cover, ill quite happily hold my hands up but i think in the main the company i use cover the majority of options and for an insurance company have good ethics behind them and release their claim statistics - how many insurance companies do that?

Hopefully it's not Payment Shield

ACG

dacouch wrote: »

Hopefully it's not Payment Shield

I said they have good ethics behind them :P

I wouldnt touch paymentshield with a bargepole.

hcb42

to counter the OP argument, the rebuilding cost is the rebuilding cost. Clearly this surveyor got it wrong and there would be some liability there. However, if my house costs £300K to rebuild, then that is what I will get back, even if I am insured for £2million. It is the same with contents insurance...I always take these sales tactics with a pinch of salt (and buy on quality and service, not price)

kingstreet

We're "panel" for GI business.

We still have Paymentshield on the panel, but TBH I haven't used them for years, along with a few other brokers I see...

In addition, we have L&G, Kew, Select & Protect and Towergate which, off the top of my head, gives around eight or nine different underwriting options.

As we offer a full advice service on GI as well as on mortgage and long-term protection business, I have to quote and analyse every option for each client. Although important, cost is only one factor in choosing the right provider.

ACG

Just coming back to this as i wanted to add something. The company i use would never come top price wise on a comparison site, but they have a guarantee built into their contract not to increase their premiums by more than 10% per year - its usually less than that.
How many times do we see on here where renewal premiums have massive percentage increases.

That can be another benefit of paying slightly more with the right company - you then dont have to waste time each year looking to renew.

mic200202

vaio wrote: »

I think a more important point is that an insurance advisor doesn't understand something as fundamentally basic as the under insurance example he gave in the OP and presumably advises his clients on that mistaken basis.

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Thanks for that Vaio.I stand by my original comments.This original policy (proposed by Abbey) was based on a mimimum recommended sum insured in the survey report.

On the original case - the loss would have been assessed as being underinsured by 42% ie £60k against the loss of £140k (my original post used 60% as an example only).

Whether a total loss or not, an insurer can reduce the amount paid in claim by the proportion underinsured.They can even refuse to pay anything at all.I agree its more common to reduce claims with smaller sums as they are much more common than a total loss.

So this claim may have been refused completely,reduced by 42%, or possibly paid up to a max £60k.My clear understanding of Abbey's policy (this was 18yrs ago) at the time is that they would have applied a reduction irrespect of the amount and whether a total loss or not.

Either way the client would have been up the creek.My point was to demonstrate the dangers of underinsurance and acceptance of minimum rebuild costs.

I have heard all the arguments before.Yes, but you can claim off the surveyor,and the insurance co will cover the full amount anyway.What total dross.All based on hot air.

The surveyor did not advise on a sum insured but merely that this is a mimum rebuild cost.Unlikely that a claim would be sucessful against him.

I have several examples of where I have seen underinsurance impact severely on customers over the years.

So,in summary,I am not mistaken on this, and I would ask that you retract the comments you posted above.

dacouch

mic200202 wrote: »

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Either way the client would have been up the creek.My point was to demonstrate the dangers of underinsurance and acceptance of minimum rebuild costs.

I have heard all the arguments before.Yes, but you can claim off the surveyor,and the insurance co will cover the full amount anyway.What total dross.All based on hot air.

So,in summary,I am not mistaken on this, and I would ask that you retract the comments you posted above.

My comments were correct.

Is this hot air from the Ombudsman enough for you...

"Policyholders can find valuation a significant problem in the case of contents policies, but it may be even more acute a problem in the case of buildings policies. Rebuilding costs are something that most householders can only guess at. Householders purchasing a property with a mortgage will usually obtain this valuation from the lender’s surveyor. Many other policyholders will rely on the purchase price (a notoriously poor indicator of rebuilding costs).

Even where the purchaser has obtained a good rebuilding cost estimate, it may not represent the maximum potential cost of rebuilding. Albeit rarely, actual rebuilding costs can necessarily exceed the sum insured; an example is given in case study 04/16 on page 20. We do not believe it reasonable in such cases for the insurer to rely on the maximum sum insured to limit their liability. It is precisely this sort of unusual eventuality that policyholders expect their insurance to cover."

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/4/exceeding-the-sum.htm

You note that the cover from the Abbey was based on a sum insured that related to the "minimum recommended cover on the survey report". This is exactly what the Ombudsman is refering to in the above quote.

Had your customer taken out cover with the Abbey and they had declined the claim (Unlikely) or applied average, then a complaint to the Ombudsman would have seen the Abbey required to pay the claim in full. Granted if it had gone to the Ombudsman it would have taken some time but the claim would have been paid.

Your example and advice is not very accurate

mic200202

dacouch wrote: »

My comments were correct.

Is this hot air from the Ombudsman enough for you...

"Policyholders can find valuation a significant problem in the case of contents policies, but it may be even more acute a problem in the case of buildings policies. Rebuilding costs are something that most householders can only guess at. Householders purchasing a property with a mortgage will usually obtain this valuation from the lender’s surveyor. Many other policyholders will rely on the purchase price (a notoriously poor indicator of rebuilding costs).

Even where the purchaser has obtained a good rebuilding cost estimate, it may not represent the maximum potential cost of rebuilding. Albeit rarely, actual rebuilding costs can necessarily exceed the sum insured; an example is given in case study 04/16 on page 20. We do not believe it reasonable in such cases for the insurer to rely on the maximum sum insured to limit their liability. It is precisely this sort of unusual eventuality that policyholders expect their insurance to cover."

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/4/exceeding-the-sum.htm

You note that the cover from the Abbey was based on a sum insured that related to the "minimum recommended cover on the survey report". This is exactly what the Ombudsman is refering to in the above quote.

Had your customer taken out cover with the Abbey and they had declined the claim (Unlikely) or applied average, then a complaint to the Ombudsman would have seen the Abbey required to pay the claim in full. Granted if it had gone to the Ombudsman it would have taken some time but the claim would have been paid.

Your example and advice is not very accurate

Yes, and from the start of the very same article which you must have missed...(my highlighting in bold...)

The sum insured is an important component of most household policies and policyholders need to take reasonable steps to assess this amount as accurately as possible. We will support those insurers which reduce payments to policyholders where the total sum insured is clearly quite inadequate to cover the property at risk.

And now your point is what exactly???

This article is clearly aimed at policyholders where the sum insured is reasonable in proportion to the claim.

The logic of your argument is that people should just insure for what they want and in the event of a loss the Ombudsman will step in and force the insurer to pay up the full amount?? Crazy.

You have still not provided a shred of evidence to support your reply to my post.

And you call my advice bad...