Mislead on Home Insurace quotes

Derek_Parker

Firstly can i say i am a retiree and not very computer experienced. I have an issue with Halifax Home Insurance, probably created to some extent by myself. In 2009, whilst investing some savings with Halifax, the Financial Adviser suggested changing home and Contents Insurance to Halifax as they had a £50 loyalty payment bonus. I checked their quote with my current insurers estimate. Halifax was a little higher, but with loyalty bonus it seemed a fair deal.

Alas I did not compare current quotations and also have not sought comparative quotes over the intervening years. Like a lot of older people, I just had renewals on direct Monthly debit and did not check increases. I assumed that I would be getting a fair premium compared with market forces and general increases over the board.

I recently received an annual renewal letter and for once checked it as i had made a small claim in November and wondered if it had any impact.

I was astounded that annual premium was £1045 for Home and Contents cover on an Edwardian 3 Bed Terraced House with around £15000 Contents cover. I managed to do a comparison check on line, feeding the details straight out of the Halifax renewal document. I elevated some of the values above standard rebuild cost for our area and increased contents to £18000.

I received quotations from 62 insurance companies ranging from £114 annual premium (Halifax) to around £270. I was astounded and contacted Halifax Home Insurance. They said quotation was correct. I asked why then was the majority of premium quotations were around £200 across the market nearly a fifth of the Halifax quotation, with Halifax offering the lowest at £114.

The complaints department suggested that the cover was different on Comparison sites and the only thing they could suggest was that Halifax offered unlimited replacement building cost on the quotation to me.

I pointed out that if my home was destroyed – replacement rebuild cost would be current rebuild cost – currently £400,000 – why was i offered unlimited replacement cost. I would not be building a luxury mansion on the site just a replacement ? Frankly they could not answer and when pressed dropped into that they could not comment on the market quotations i got off line, or make comment on values of quotation from other companies. I pointed out that if there was a wide range on comparison costs, i could understand the elevated premium cost suggested, but as 62 companies were within £100 with maximum of £250 – how could the justify a premium of £1045 ? They offered no answer other than the unlimited factor.

I have asked for a written reply explaining the glaring variability . They suggested that if not happy, to contact the Insurance Ombudsman.

I feel I have been miss sold cover unnecessarily since 2009, that no satisfactory explanation has been given. I wanted my plight to be highlighted with the media, to warn others who may have been misled by Halifax.

I would appreciate some guidance of what my actions should be.

Faith177

Derek_Parker wrote: »

Firstly can i say i am a retiree and not very computer experienced. I have an issue with Halifax Home Insurance, probably created to some extent by myself. In 2009, whilst investing some savings with Halifax, the Financial Adviser suggested changing home and Contents Insurance to Halifax as they had a £50 loyalty payment bonus. I checked their quote with my current insurers estimate. Halifax was a little higher, but with loyalty bonus it seemed a fair deal.

Alas I did not compare current quotations and also have not sought comparative quotes over the intervening years. Like a lot of older people, I just had renewals on direct Monthly debit and did not check increases. I assumed that I would be getting a fair premium compared with market forces and general increases over the board.

I recently received an annual renewal letter and for once checked it as i had made a small claim in November and wondered if it had any impact.

I was astounded that annual premium was £1045 for Home and Contents cover on an Edwardian 3 Bed Terraced House with around £15000 Contents cover. I managed to do a comparison check on line, feeding the details straight out of the Halifax renewal document. I elevated some of the values above standard rebuild cost for our area and increased contents to £18000.

I received quotations from 62 insurance companies ranging from £114 annual premium (Halifax) to around £270. I was astounded and contacted Halifax Home Insurance. They said quotation was correct. I asked why then was the majority of premium quotations were around £200 across the market nearly a fifth of the Halifax quotation, with Halifax offering the lowest at £114.

The complaints department suggested that the cover was different on Comparison sites and the only thing they could suggest was that Halifax offered unlimited replacement building cost on the quotation to me.

I pointed out that if my home was destroyed – replacement rebuild cost would be current rebuild cost – currently £400,000 – why was i offered unlimited replacement cost. I would not be building a luxury mansion on the site just a replacement ? Frankly they could not answer and when pressed dropped into that they could not comment on the market quotations i got off line, or make comment on values of quotation from other companies. I pointed out that if there was a wide range on comparison costs, i could understand the elevated premium cost suggested, but as 62 companies were within £100 with maximum of £250 – how could the justify a premium of £1045 ? They offered no answer other than the unlimited factor.

I have asked for a written reply explaining the glaring variability . They suggested that if not happy, to contact the Insurance Ombudsman.

I feel I have been miss sold cover unnecessarily since 2009, that no satisfactory explanation has been given. I wanted my plight to be highlighted with the media, to warn others who may have been misled by Halifax.

I would appreciate some guidance of what my actions should be.

Unlimited cover would take into account costs on top of just rebuilding the house so for example site clearance fees, surveyors and anything else needed to rebuild your home

Companies are allowed to charge whatever premium they like just because someone else is cheaper it's their choice what they charge. It depends on that company's profits, losses and portfolio

Just because you didn't look elsewhere and paid more doesn't mean it's the company's fault. Halifax should have sent you renewal documents each year detailing their price and your cover this all they have to do

dacouch

I strongly recommend you properly review your contents sum insured, £18k would appear to be under insured.

It's essential that you cover your entire contents for the actual NEW REPLACEMENT COST.

If you don't insure for the full amount the Insurer can and will apply "Averaging" aka "Under Insurance". This means they calculate the true replacement cost of your contents (At new cost) and reduce any contents claims by the percentage.

If you insure for £10k but have £20k, the Insurers will reduce your (Contents) claims payments by 50% even for small claims.

You'll find arranging a more reaslistic sum insured will either make no difference to the premium or literally £5 a year

d70cw6

the renewal premium is high because it is a renewal premium and people typically dont compare prices (such as yourself for the last x number of years).

Apathy pays dividends for them.

TSx

Your insurance forms a set of annual contracts since 2009.

Prior to each new contract, a renewal invitation is sent offering you the option of continuing with cover or declining to accept their quotation.

Whilst it may not seem fair (and I'm certainly a fan of removing new customer subsidies to make everything more transparent), Halifax have done nothing wrong.

Unfortunately most companies now operate to this model - primarily because they need to have cheap premiums for the first year to compete with other companies.

A complaint to the ombudsman is likely to be unsuccessful as they have not done anything wrong and pricing is a commercial decision they are entitled to make.

Aretnap

If you spend years shopping at Tesco out of habit, then one day you pop into Asda and realise that food is cheaper there, can you demand your money back from Tesco?

I'm afraid not. The insurer offered you a product at a price, you had the choice of accepting it or not, you accepted (passively rather than actively, but still accepted) and as far as the law goes that's that. The Ombudsman won't intervene - pricing is regarded as a commercial matter which is outside their remit. I suppose if you contact a consumer column in one of the newspapers and threaten the insurer with some bad publicity there's a chance that you might get a bit of money back - but it would be as a goodwill/PR gesture on the part of the insurer rather than something you have a right to.

Yours is a rather extreme example, and it seems rather cynical of Halifax to hike the price up quite tht much, but it's fairly standard practice to offer better deals to new customers than to renewing ones, which is one reason why it pays to shop around. And not just among insurers - broadband companies, gyms, banks and even supermarkets (Sainsbury's gave me a voucher for £30 off my first online shop the other day) all give discounts to new customers. It's a fact of life that if you shop around, haggle and generally make companies work for your business you'll get better deals than you will if you just accept whatever you're offered first.

It's not exactly a new thing either. I remember 20 years ago when I fstarted driving renewing my car insurance meant spending a Saturday morning with Yellow Pages (anyone remember that?) phoning around insurance companies - and I could nearly always find someone to beat my renewal quote. The only difference now is that thanks to the Internet, shopping around takes 15 minutes instead of all morning.

Regarding unlimited rebuild cover, that's not necessarily mis-sold. Many policies offer either unlimited cover, or a generic figure (say £500K) which is much larger than a typical rebuild cost as standard. They often cost little more than a policy with a precise limit, because the insurer knows roughly what it costs to rebuild a house and that they are not actually going to be paying out unlimited amounts of cash. And it protects you the customer from the risk that you estimate your rebuild cost a bit too low. Imagine if you put down £400K, your house burns down and rebuilding it actually ends up costing £410K - that leaves you in a bit of a hole and wishing you'd paid a little extra for unlimited cover. It doesn't really account for the difference in premium, but unlimited cover is not an inherently bad idea.

takman

You seem to make a point about how your retired and it's common behavior for people of your age to let your insurance policies renew without checking your paperwork. But this is just an excuse for poor money management!. You really need to pay more attention to you bank balance and start reading important letters if they can take that much money each year without you knowing!. You really need to shop around every year on all your insurance policys!.

stokesley

takman wrote: »

You seem to make a point about how your retired and it's common behavior for people of your age to let your insurance policies renew without checking your paperwork. But this is just an excuse for poor money management!. You really need to pay more attention to you bank balance and start reading important letters if they can take that much money each year without you knowing!. You really need to shop around every year on all your insurance policys!.

Quite! Being retired gives me endless time to be a b****y nuisance to insurers, banks, and every other pain in the backside that I didn't have time to annoy when I was working.:rotfl:

EdGasket

I think you are all being rather harsh on the OP. It is surely taking advantage of the customer to charge them almost 10x the going rate for insurance.
I would raise a complaint in writing to Halifax that you have been overcharged for the last x years by x amount for no apparent reason. Then if you don't get satisfaction you can escalate it to the insurance ombudsman for a ruling. It will cost you nothing but will cost Halifax to deal with it which will at least give you some satisfaction win or lose.