How can quotes be SO different?!

skintandscared_2

I have contents insurance only, as we are tenants. We renewed our insurance in July and pay £17.49 per month.

We're planning to move in October and I just called the insurers for a rough estimate of the difference in our new home. They have indicated they will want £338.14 on top of the premium we already pay!

So of course I check out the difference if I just cancel the policy and start a new one (as recommended by the chap I spoke to, who said there would be no cancellation penalty in that instance) and the annual quote is still £400.

I then speak go to an online comparison site and for the same cover, legal protection, excess, etc, I can get the insurance from a host of different companies for £80-£120 for the year.

Obviously I will be switching when I move, but how can these quotes vary so massively between companies?! Is it really as simple as my current company perhaps have a lot of customers in that area who have claimed?

KitGeorge

Well there's different - and then there's DIFFERENT!
Last year's home and contents with my bank (RBS) was quite reasonable; this year's renewal quote was SIX times as much :mad:. No claims in the year, no new circumstances, no change at all. Okay, they did claim that last year's quote was an 'introductory' offer - but six times as much??

Even checking around with other companies for a quote I find some are quite eye-watering. Given that they're all quoting from the same 'tick list' ( I could do the Two Ronnies sketch now ... answer before you hear the question ) it's hard to see why there should be hundreds of pounds difference between quotes.

Kit George.

lisyloo

Could be a number of reasons.
It could indeed be using a different database with higher claims.
But it could also be that you are not qualifying for a NEW customer discount.
Unfortunately loyalty doesn't pay.

About 85% of customers don't shop around so it pays insurers to just up the premiums for apathetic customers and just drop prices to attract new business.

The golden rule on here is - Shop around.
But still some companies will be better than other due to different pricing models and different claims data.

Wyndham

You also need to be aware of cover levels. You pay more, but have higher amounts covered, or don't pay as much of an excess, or have accidental damage cover included, or have expensive individual items included.... best way is a check with 2 documents side by side, you may be surprised.

Also, check you're not under insuring. If the level of cover is lower, it might not actually cover all your stuff, and even if you're making a partial claim rather than a total claim, you may only get a proportional amount rather than the full amount.

annie1975_2

My insurance is with churchill and every year they quote about £250, This is for buildings and contents,and every year I cancel it and go online and renew it for less than half of that for the same level of cover.And the cover is adequate for what we need.
There can be a huge difference between companys too.
Its like car insurance,you get a stupid quote, and shop round then when you ring your insurance up to cancel they match it for you.

dunstonh

It could also be, and most likely be that you are not comparing like for like.

skintandscared_2

Thanks for all the views and comments. I do think, as far as possible, I'm comparing like for like as I'm ticking all the same boxes and asking for the same criteria as I had already - i.e. legal protection, same excess, same value of cover. We did need to make a claim 18 months ago but I have fully disclosed that on the other quotes so it's not even that which is affecting the prices.

opinions4u

Different address.
Different approach to claims history.
Different types of cover.
Different approach to pricing for new and existing customers.
Different type of property.
Different specialised market segments for different insurers.
Different claims experience for different insurers for that postcode.

skintandscared_2

opinions4u wrote: »

Different address.
Different approach to claims history.
Different types of cover.
Different approach to pricing for new and existing customers.
Different type of property.
Different specialised market segments for different insurers.
Different claims experience for different insurers for that postcode.

Sorry, I didn't mean the difference between the old and new properties. I meant the difference between insurance companies on their quotes for the same new property with all the same criteria. I do understand some of the other variables you mention but am just surprised that one quote can be five times higher than another for essentially the same cover.

Shenanigan

skintandscared wrote: »

the difference between insurance companies on their quotes for the same new property with all the same criteria.

Lets ignore the differences in policy and I don't just mean Yes or No to accidental damage, I mean the small print most people never read.

Lets also ignore the admin side - UK call centres vs overseas.


You're looking at it all wrong. This isn't like you and Mr Smith buying the same pair of shoes and being charged different amounts.

Here's an example that's stretched a bit far, but helps make the point: Take a company like Nike. If Joe wants some new trainers, he has to pay £120 for them. But if Michael Jordan wants some, he gets paid to wear them. It's not the product, it's the person.

You ask an insurance company to evaluate you as a financial risk and they do it. Some may see you as a low risk, others high.

Insurers make money from underwriting profit (selling more in policies than they pay out) but also from investment. In the time between you paying your premium and them paying your claim, they're holding a lot of money. This is invested, meaning insurers can actually operate at an underwriting loss and still be profitable.

Some companies may be happy to under value policies in order to have money for investment.

dacouch

Your Insurer might have had a few very large claims in that area eg flood, subsidence or theft. Often they will then price their premiums to reflect their view of the increased risk or sometimes they price themselves to deter attracting business from that area