House buildings & contents - enquiry raises renewal premium

PcRepairman

A few months ago, my wife dropped her phone & cracked the screen, so I called the insurance company (Legal & General) to enquire whether or not it would be worth claiming on my contents insurance. Because of the policy excess, and possible effect on future premiums, we decided not to claim & paid for the repair ourselves. However, when the time came to renew our policy we found a cheaper one online with Admiral. After answering all their questions over the telephone, they then saw we had made an enquiry and immediately raised their quote by £70, even though we had made no actual claims on the policy. I've never heard of this before - is this a new practice in the home insurance industry? It doesn't seem fair to us!

InsideInsurance

It depends on if they ask about "claims" or "incidents". If it is the later then in theory you should declare every time you break something, stain something etc. The fact that this incident is on record from your call means you'd not be sensible to "forget it" when getting new business quotes over the next 3-5 years.

For car insurance its been incidents that are required to be declared for a long time. Home insurance is more recently started to move that way too. Some home insurers only ask about claims and so to them it doesnt need to be declared (but check the help text on any questions as some do specify claimable events and not just actual claims)

PcRepairman

Thanks for that information, InsideInsurance. It's interesting you say "in theory you should declare every time you break something" but in the real world it just doesn't happen. And this is why - the insurance company will penalise you. In future I will avoid contacting my insurers unless I'm making a claim.

InsideInsurance

In the real world of cause if you scrape your gatepost you get the local back street garage to fix it for less than your excess but legally you'd be obliged to tell your insurers about the "incident".

Pragmatically I doubt many insurers would bother recording everytime you kerbed your alloy or dripped some coffee onto your carpet but in theory they are "incidents". Of cause breaking a £400 phone is a little bit more than a drop on the carpet that you simply move the rug to cover

katejo

InsideInsurance wrote: »

In the real world of cause if you scrape your gatepost you get the local back street garage to fix it for less than your excess but legally you'd be obliged to tell your insurers about the "incident".

Pragmatically I doubt many insurers would bother recording everytime you kerbed your alloy or dripped some coffee onto your carpet but in theory they are "incidents". Of cause breaking a £400 phone is a little bit more than a drop on the carpet that you simply move the rug to cover

I don't think you should have to inform them if you decide to pay for it yourself. Last November the storms blew a few ridge caps off my roof. I chose to pay for the job myself because I didn't want to give the insurer an excuse to raise my premium for a relatively small job. It isn't a case of me being accident prone or careless. It was unusually strong winds.

PcRepairman

katejo wrote: »

I don't think you should have to inform them if you decide to pay for it yourself. Last November the storms blew a few ridge caps off my roof. I chose to pay for the job myself because I didn't want to give the insurer an excuse to raise my premium for a relatively small job. It isn't a case of me being accident prone or careless. It was unusually strong winds.

I agree with katejo. It seems the insurers will happily raise our premiums even though they themselves have suffered no financial loss. That is fundamentally unfair. We are in the process of submitting this to the ombudsman to see what they have to say.

rs65

PcRepairman wrote: »

I agree with katejo. It seems the insurers will happily raise our premiums even though they themselves have suffered no financial loss. That is fundamentally unfair. We are in the process of submitting this to the ombudsman to see what they have to say.

It is all about risk and you are now riskier than someone who hasn't dropped their phone.

You need to exhaust the insurers complaints procedure before going to the ombudsman. The procedure should be in your policy.

PcRepairman

rs65 wrote: »

It is all about risk and you are now riskier than someone who hasn't dropped their phone.

You need to exhaust the insurers complaints procedure before going to the ombudsman. The procedure should be in your policy.

That doesn't make sense. Surely 'once bitten,twice shy'? if I dropped my phone and paid for it to be repaired I'd be LESS likely to do it again and therefore LESS of a risk! I've read about similar practices with car insurance, where people have had to resort to writing to the press before the insurance company suddenly back-track and refund the overpayment and/or pay compensation for their 'mistake'. The practice itself is unfair so should be banned.

rs65

PcRepairman wrote: »

if I dropped my phone and paid for it to be repaired I'd be LESS likely to do it again and therefore LESS of a risk!

Possibly. Accidents happen though.

nobbysn*ts

PcRepairman wrote: »

I agree with katejo. It seems the insurers will happily raise our premiums even though they themselves have suffered no financial loss. That is fundamentally unfair. We are in the process of submitting this to the ombudsman to see what they have to say.

An excellent decision. If enough people do this, maybe the insurers will realise they can't take the customer for a ride.

System

PcRepairman wrote: »

It seems the insurers will happily raise our premiums even though they themselves have suffered no financial loss. .

You can see their point of view though. They raise your premium if you live in a flood-risk area even if you haven't had a flood so haven't cost them anything.
Insurance is about weighing up the risk of things happening before they happen.