House buildings & contents - enquiry raises renewal premium

PcRepairman

Clifford_Pope wrote: »

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.

I can understand assessing risk based on known facts (you live on a flood plain therefore you are more likely to be flooded) but risks based on pure speculation (you've had an accident therefore you are more likely to have another??) do not hold water (no pun intended) in my book.

System

PcRepairman wrote: »

(you've had an accident therefore you are more likely to have another??).

Yes. That's why we have an expression "accident-prone".
Insurance company statistics of accidents doubtless confirm the correlation.

The converse is also true, hence No Claims Discounts.

InsideInsurance

PcRepairman wrote: »

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!

This is debatable but you have to remember that insurers do not use logic but statistics. They look at the population, segment it based on the rating factors and look at the claim rate and average settlement for each segment. From that they can derive a technical premium to cover the risk element. The on top you have amounts to cover operational costs and then finally commercial considerations that may drive premiums up or down.

You say you've dropped it once and so are less likely to drop it again? I am not sure you are the norm in that way - though dont personally have statistics one way or another. I know my wife puts her phone in her back pocket and more than once its ended up in the toilet as a consequence but that hasnt caused her to change her habits (just keep some dry rice in an air tight container in the airing cupboard in preparation for the next time)

Similarly there are plenty of people on here who say they "frequently" lose/ break their phones and thus are now struggling to get cover.

As to Motor, its fairly logical that if you park your car in a car park twice and it gets hit with the TP not stopping and no CCTV then you are clearly parking somewhere dodgy and your more likely for it to happen again then someone who parks in a better car park.

katejo

nobbysn*ts wrote: »

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

The knowledge that being honest with the insurer will result in an increase in premium will put people off declaring any job done. I have borne the expense so why should they benefit? My ridge tiles have been replaced with new ones so are less likely to blow off in a future storm.

InsideInsurance

katejo wrote: »

The knowledge that being honest with the insurer will result in an increase in premium will put people off declaring any job done. I have borne the expense so why should they benefit? My ridge tiles have been replaced with new ones so are less likely to blow off in a future storm.

Because insurance is based on the principle of utmost good faith

If you are going to a new insurer why should you declare any claims from your prior insurers given they didnt pay them either?

On the flip side, why should your insurer give you any form of discount for all the years you've been claim free because you havent been claims free with them?

The principle is simple, you honestly answer a series of questions which allow them to access your risk accurately and create a price. You then decide if that price is acceptable or not. In theory at least, if you are correct and the fact you having had prior storm damage already repaired at your own cost means your a lower risk then their experience will reflect this and the price also reflect this.

PcRepairman

katejo wrote: »

The knowledge that being honest with the insurer will result in an increase in premium will put people off declaring any job done. I have borne the expense so why should they benefit? My ridge tiles have been replaced with new ones so are less likely to blow off in a future storm.

I wholeheartedly agree. It seems that honesty is not the best policy when dealing with insurers.

InsideInsurance

PcRepairman wrote: »

I wholeheartedly agree. It seems that honesty is not the best policy when dealing with insurers.

Of cause not, you'll find you get a much cheaper quote if you say you are a 45 year old person with a clean license since the age of 18, 20+ years NCD and drive a £7,000 1.1l Corsa rather than saying you're a 20 year old, only 1 years license, 3 fault claims, 2 speeding tickets and driving a heavily modified BMW M5 and have a previous unspent conviction for fraud.

Just dont expect to get any claims paid out.

katejo

InsideInsurance wrote: »

Of cause not, you'll find you get a much cheaper quote if you say you are a 45 year old person with a clean license since the age of 18, 20+ years NCD and drive a £7,000 1.1l Corsa rather than saying you're a 20 year old, only 1 years license, 3 fault claims, 2 speeding tickets and driving a heavily modified BMW M5 and have a previous unspent conviction for fraud.

Just dont expect to get any claims paid out.

I wasn't referring to facts about oneself such as age, sex, convictions or previous actual claims. I only meant home jobs for which I had paid myself without a claim. It could also refer to a spell of illness on holiday which had cleared up without treatment. After a recent trip I did have to make a claim but others on my trip were unwell and didn't seek medical attention. I am sure that they have not informed their insurers.

SuperHan

But why is there no reduced premium for the fact that you've established yourself as a person who won't claim on their home insurance willy nilly.

Yes you may be more likely to drop your phone in future, but you're no more likely to claim off your insurance, given that you didn't this time, so in theory future phone drops will have no impact on the cost to the insurer...

InsideInsurance

SuperHan wrote: »

But why is there no reduced premium for the fact that you've established yourself as a person who won't claim on their home insurance willy nilly.

Yes you may be more likely to drop your phone in future, but you're no more likely to claim off your insurance, given that you didn't this time, so in theory future phone drops will have no impact on the cost to the insurer...

There is a reduction for you having not claimed, because you have a clean claims history and an intact NCD. Insurers are not idiots and do realise a large proportion of minor accidents do go unreported.

Whilst because you are a clumsy person you decide not to claim for your iPhone it does mean you are also more likely to break your £10k Patek Philippe watch and so that potentially outweighs the not claiming on low value claims.

Certainly insurers do factor these things in, pricing was different between two former motor insurer brands owned by the same company because one was aimed at the mass affluent segment who tend to get every scratch/bump repaired where as the other brand was aimed at the lower mass market where if they get a moderate bump, well it just now matches the one on the other side.