Home Insurance

mkman

Hi There,


I just discovered that my mum has been paying 47.99 per month for her Home Insurance (buildings + contents) from Lloyds. She only lives in a small 2 bedroom bungalow and I thought to myself that 575 pounds a year seems ridiculous!


I found another policy with Direct Line that covers her for more things but at only £15.00 per month, a BIG difference!


I can't stand some of these insurance companies fleecing people, especially the elderly and vulnerable. My mum is a pensioner and I cannot believe the difference in price. I expected some variation, but £180 vs £575??!!!


Hope this helps others on here.

paddyandstumpy

Whilst it's not right, and there is an FCA Thematic review ongoing about Vulnerable Customers; it's a wider scale issue in the industry now where renewal pricing is far higher than new business pricing (that's also under review).
The only way to get around this, is to find a company where the NB rate isn't subsidized by higher renewal rates. This logically leads you to the Broker market, where insurers compete on a panel, before the Broker then competes in the wider market. This ensures a far more realistic price, as Broker insurers need to make money from year one, rather than writing down the losses in year one and working off a retentive model.
I hope this makes sense; best thing to take from it is that loyalty no longer pays and 'doing nothing' is now a license for Insurers to raise rates. It's not right, but it's the market we are currently in.

mkman

Many thanks for your reply. I agree that loyalty no longer pays. I do find this strange in an ever competitive marketplace though. You'd think that company's would want to look after their customers and prevent them from 'defecting' to the opposition! It is certainly a sign of the times though! Thanks again.

mattk_180

Why do you think this is insurers fleecing people? Because Lloyds is more expensive than Direct Line?


It's not Lloyds fault that that she didn't shop around. She doesn't HAVE to renew their policy?

mkman

mattk_180, Due to the 'massive' difference in price I see this as fleecing people. Sorry if you have a different view on it, but that's my opinion.


I agree that my mother could have shopped around, but she is not tech savvy and finds it a struggle to shop around online for different quotes. The big issue here is that if a person is tech savvy then they can get a much better deal than somebody that isn't, and in my opinion that is totally unjust! It's not just that Direct Line is cheaper than Lloyds, it's the 'huge' difference in price that I find staggering! Anyway, my mums situation is sorted now. I just wanted to make others aware on here.

FutureGirl

But Lloyds would have told her the renewal price each year, and she would have had an opportunity to accept / decline this. If someone isn't tech savvy perhaps a family member that knows this should help them sooner?

mkman

Ok, what happens if there are no other family members to help? My mum is fortunate that she has family to help and she has now moved away from the 'rip-off' policy to something more reasonable and sensible.


My point is that insurance companies shouldn't be able to charge such a vastly different amount without some kind of justification. In my opinion it is immoral and targets the vulnerable. Hopefully some regulation in the future will help stamp this kind of practice out.