Burglary causes no insurance or quotes

morrismen

Last year my parents where burgled in a home break-in overnight. The thieves ransacked the place and took everything of value. Now it was an alarmed property, but the thieves managed to disarm it somehow so they knew what they were doing even though they were caught on CCTV and brought to justice.

The insurer paid up and covered the cost of lost items very well indeed - as a good quality insurer would! However the next year, there was a 6% uplift on Home and Contents insurance. So they went shopping around.

On trying to get comparative Home and Contents insurance quotes, the burglary was registered for all insurers to see. None of the prominent big insurers would quote or insure their property because of the break-in! However the original insurer still honours a renewal, but with a 6% uplift in premium. So what gives?

I was under the impression ALL insurers shared risk and cost by levelling insurance premiums across everyone in a postal code area, e.g. risk from flood, high crime, etc. So why does one burglary remove the benefit of both Home and Contents insurance being provided by other insurers? How does it make a person's home uninsurable with others? Risk is one thing, but if the original insurer will still insure, then they accept the risk, so why won't other insurers? It seems rather unfair. Comments?

dunstonh

On trying to get comparative Home and Contents insurance quotes, the burglary was registered for all insurers to see. None of the prominent big insurers would quote or insure their property because of the break-in! However the original insurer still honours a renewal, but with a 6% uplift in premium. So what gives?

Properties recently burgled have a higher chance of suffering a repeat not long after. So, if your parents are in an already higher risk area and suffered a recent claim, then many providers on comparison sites wont be interested (they like to cherry pick). Local brokers (not swinton) may be a better source at this time. However, a 6% uplift is not a bad outcome.

I was under the impression ALL insurers shared risk and cost by levelling insurance premiums across everyone in a postal code area, e.g. risk from flood, high crime, etc.

That is one of a number of measures. It is not the only one.

It seems rather unfair. Comments?

its not unfair. Businesses are free to accept or refuse business from whoever they like as long as it is not discrimination.

forgotmyname

Risk of another incident is quite high, After an insurance payout a lot of people rush out and get lots of new stuff to replace the stuff stolen. Been known for the burglars to keep an eye out for new items being bought or delivered and then hit again.

Less likely if they have been caught but still a bigger risk.

morrismen

That's the bit I can't quite understand. If the perpetrators are now locked up for 5 years each, then they won't burgle the same house or anyone else for a long time. ok, so they may have told their mates to burgle it again, however with all the jewellery and valuables gone, replacing with the same quality items is virtually impossible with all the cheap stuff around today. So any burglar with any brains would know there's either nothing there now or nothing of any real value.

And, although businesses can justify in terms of risk, with the risk and costs being shared across ALL the public so that ALL our insurance is levied for flood, crime, fire, etc then why are people who are victims then also persecuted by the Insurers? It doesn't seem right.

dunstonh

That's the bit I can't quite understand. If the perpetrators are now locked up for 5 years each, then they won't burgle the same house or anyone else for a long time. ok, so they may have told their mates to burgle it again, however with all the jewellery and valuables gone, replacing with the same quality items is virtually impossible with all the cheap stuff around today. So any burglar with any brains would know there's either nothing there now or nothing of any real value.

Insurance company quote on the basis of collective stats. i.e. x% of claims due to burglary result in a further burglary at y% which is greater than the normal. They dont look at individual cases. It is part of that collective sharing of risk you mentioned.

And, although businesses can justify in terms of risk, with the risk and costs being shared across ALL the public so that ALL our insurance is levied for flood, crime, fire, etc then why are people who are victims then also persecuted by the Insurers? It doesn't seem right.

Risk is not one measure. It is a wide spread of measures. I am in a low crime area and not in an area of flood risk. So, I am not paying a higher amount to cover that increased risk. Part of my premium goes towards the general risk pool for those risks but someone living in a higher risk area would pay more.

As for fairness, spreading of risk has to be fair all round. Why should those not in a high risk area pay so a higher amount for those that are in a higher risk area? Yes, there is a bit of sharing of collective risk but those who are not higher risk should pay less.

As I said, a 6% increase in premium following a burglary is not a lot. On my premium, that adds about £10. If my insurer had been as good as you say theirs was then I would be happy to pay that extra amount knowing how good they were.

caliew

Hi I have worked in insurance for a number of years but I have just left due to childcare reasons. Was the claim made on both the buildings and the contents? If say for example locks were broken then the claim I expect got settled on buildings as well as contents so that's 2 claims in total, was there another claim for another incident in 5 years on the home? The reason I am asking is because if around 3 claims have been put in then occasionally the premiums could come in high or not quote at all due to risk.

Unfortunately insurance is not usually a shared risk because of post code, there are about 30 underwriting factors these are usually the following factors claims history and existing claims, solvency history and existing financial status ie. not bankrupt, who lives at the property, each job usually a loading on the system for example say you were a jeweler and noted to have a high level of stock at home each persons job usually holds its own code that looks at trends of risk (which is probably wise not to mince your job about because if you are in a claim situation it would be horrible to be knocked back for misinformation), the size and style of the property holds its own risk eg. year built, if the property empty, if work carried out at home (more equipment), state of repair (yours might be cared for neighbours might not), types of locks and window locks (each locking system holds a risk rating), the area the flood, heave, subsidence, landslip, coastal, river erosion etc (usually within 150 meters, neighbour might be further away from river you might be near river etc.) those are some examples, then cover examples if you have high end items in property the high end items might be a case that underwriters won't insure as its too risky building might get broken into which locks and doors claims go on buildings insurance, high end items say which could be stolen go on contents insurance. However if you do have high end items they still need logging for risk.

There are so many underwriting factors everyone is different so it might to be the claim itself which is causing the bother but other changes against each factor there are so many combinations.

Even if you feel nothing else has changed just one year on can possibly make differences as your property is a year older, or a job change something little can still cause the shift. If you feel you might have missed something try rekeying on an aggregator site (comparison site) as accurate as possible and see what comes up something might have been miskeyed and something on your existing renewal slightly may have changed.

As a consumer it is your choice if you want to stay or go perhaps try all the options of recommended insurance companies on the MSE site also, however sometimes if you do too much shopping around it could possibly affect your credit scoring system if its made aware they are doing credit checks as part of the process.

Hope this helps

forgotmyname

We all pay x amount over the odds to cover any potential losses from the insurer, those in high risk areas pay a bit more also and those that have claimed pay a bit extra also.

You say the modern stuff is cheap junk compared to the older stuff, but being shiny and new it will sell easier.

Same with electrical appliances, you may have an older TV built to last, but the new replacement is likely to have more bells and whilstles and again sell easily.

rs65

morrismen wrote: »

The insurer paid up and covered the cost of lost items very well indeed - as a good quality insurer would!

IPT went up 3.5% in October so the premium increase is 2.5%. Some people report increases much higher without claims.

You are with a quality insurer who has proved their worth when it came to a claim. You want to change insurer for the sake of 2.5%?

HHarry

Our premium went up by 20% following our burglary. It was a £70 increase, but I was expecting it to be much more following a £10k claim.

And in our case they did come back, 9 months later, but were scared off by the alarm we had fitted. I'm afraid it's all about the increased risk.

morrismen

All good points and thanks all for the feedback. The thing I think about is that the victims of crime do not wish a burglary perpetrated on the them. To then be penalised by insurers without a quote seems unreasonable to many people.

If you were rich, you may just say well I'll pay you (the insurer) £20,000 to insure it and they would say "Oh well, of course we'll see what we can do then". So this is what I mean by a collective level of insurance when we all pay for it - they do level it out so that there is a collective annual increase of 2.5% or the like.

The key point here is that if there is a break-in and burglary, the risk is the same as the original insurer taking it on because the same information is listed on the same central insurance system database. A risk may still be calculated differently per insurer, but a quote should be reasonable and within the same ball park figures, rather than no quote at all.

And agreed, for the sake of 2-6% saving most would not bother. Pensioners who are trying to save some money on insurance by shopping around (and we're all advised to do so these days), and then get the door slammed in their face, find it quite unreasonable.

rs65

morrismen wrote: »

A risk may still be calculated differently per insurer, but a quote should be reasonable and within the same ball park figures, rather than no quote at all.

Insurers are free to quote or not quote for any particular risk. A quote doesn't have to be reasonable (who defines what reasonable is anyway) or anywhere near the same ballpark. They don't pool money collectively.

Clearly one recent (significant) claim puts them out of most insurers appetite. They have shopped around and established that their current insurers are giving them a comparatively excellent deal.

Shop around again next year.