Are all insurers going downmarket?

thrifty_pete

I haven't bought a new insurance policy for a few years now, but it seems to have got much more time consuming and frankly stressful. Some of the wording on insurers' websites is becoming rude and threatening. It puts you off being a customer of an organisation who issues so many threats! This one from Admiral makes you wonder about the mindset of the people responsible:

Is contents insurance a legal requirement?
Unlike car insurance, you do not have to have contents cover by law so you won't get prosecuted if you're caught without it.

Who is going to "catch" me without contents insurance exactly?
I'm used to paying more for better service - my weekly shop at Waitrose would cost less in Asda I'm sure. For insurance this doesn't seem to hold true - the John Lewis insurance products are somewhat more expensive but the policy is still very time consuming to read and understand.
I tried to explain to one of the salespeople that I am not buying insurance for financial gain, as fraud is illegal, immoral and I have a job so I can earn money, I don't need to steal it. They say there are databases of claims to stop fraud, if so, why waste my time threatening me? Imagine if you went in to your local supermarket and the first thing you saw was a security guard telling you shoplifting was a crime and if you put a foot wrong you'd be prosecuted. You would just walk out!
To an intelligent person, it suggests they have a real problem with fraud and lack the resources or skills to deal with it. Which is sad as shareholders and other honest policyholders have to pay for insurers' lack of diligence.
Perhaps this is the same trend as with flying. The main airlines have had to reduce their service to compete on price with budget airlines.

Chickenlips

There's a huge difference in policies. If you want decent cover, you're looking at paying four digits in some cases.

John Lewis is a brand - you need to be looking at who underwrites it.

A little bit more doesn't equal better cover.

The insurers base their premiums on the risks they are willing to cover. The lower the premium... normally means the lower amount of risk passed to the insurer.

NFU, and Hiscox ect are the Waitrose equivalent in this instance.

If you want to make sure you get better cover (based on the medium priced policies) you have two options:

1) Learn to read and interpret the policies so you know which is better value.

2) Go through a decent broker.

There's no minimum standard for this type of insurance.

Regulations mean that the wording has to be more friendly and that insurers have to ask questions in a specific way and explain things to customers. They probably mention contents insurance isn't a legal requirement so people can't claim it was mis sold as they thought they had to have it.

By caught, they probably mean if you had a total loss and you didnt have contents you wouldn't be penalised. On the buildings side, your mortgage provider might not be so forgiving!

It's always worth getting contents cover if you don't own the property. People dont seem to get that landlords insure their financial interests. If the home you rent burns down due to no fault of the landlord, his cover will cover his loss of rent and building. Your contents and alternative accommodation will not be covered (many tenants are shocked by this). Some letting agencies insist that tenants have contents cover for the reason that they'd be homeless and without possessions in the event of a large loss.

The only time the landlords cover would pick up AA is if the tenancy agreement made them responsible for rehoming you and their cover extended to AA (not just loss of rent).

It's an interesting subject, although I may have waffled on a bit much.

To answer your question: insurance isn't going downhill, insurers are having to be more clear with their wording about how little they cover! It's badly written policies that end up getting paid, because the FOS rule on the side of the party that didn't write it. They are removing the ambiguity, revealing what you actually get for the money you pay. Whilst some policies change the cover they offer slowly over time to reflect claim trends, it's a case of of the policy wording not being able to hide behind jargon.

thrifty_pete

The threats come across as unprofessional to me, and misleading. Telling a gullible person they could be "caught" without insurance is silly. Why not sell the benefits?
Normally sales is about selling a happy romantic fantasy world - "Give us money and we will take away the fear and uncertainty" that should be the message.
It is such a contrast with the insurance claims I've made (admittedly a long time back) where they were paid out promptly and very fairly. If the claims department can act professionally, why can't the sales department?

huckster

Think in the FAQ section, the Insurers cannot add any answers that are promoting sales. This is down to FCA rules, which cover communications. The Insurers websites now have to conform to specific requirements.

So this is not a question of professionalism or being unfriendly.

System

Chickenlips wrote: »

By caught, they probably mean.

Like being caught in a rain shower, or caught short


It's careless and needlessly emotive language. No one gets "caught" not having contents insurance. You make a reasoned decision whether in your circumstances you need that cover or not, a bit like buying an extended warranty or not.

thrifty_pete

huckster wrote: »

Think in the FAQ section, the Insurers cannot add any answers that are promoting sales. This is down to FCA rules, which cover communications. The Insurers websites now have to conform to specific requirements.

Talking about prosecution and getting "caught" in the same sentence plants the idea in the mind of the unwary, i.e. could increase sales in my opinion.
If silly sentences like this were due to FCA rules, why can't I find any other examples?
So with the Admiral brand I now associate with Dixons selling me overpriced insurance for consumer electronics or the garage who tells me the leaf springs in my car need to be taken off and oiled otherwise it is an MOT failure.
That's what I mean by downmarket - companies who assume their customers are stupid and can be overcharged for unnecessary work with threats and fear are usually at the bottom end of the market.
At the higher end of the market, sales technique is based on flattery not threats "A man like you couldn't be seen with a oven costing less than £800. If you put a £20 joint of beef in a cheap oven for your Sunday lunch it would be a waste in a cheap £400 oven." I was once told in John Lewis.
That could work on me. Telling me "Dat cheap oven use asbestos 'cos EU regulations so I fink you should buys dis £800 one" would not.

elsien

I'm failing to see how telling you clearly that there is no legal requirement to have contents insurance constitutes a threat.

keith1950

As above.....total over reaction to insurer trying to be totally clear in their explanation.

thrifty_pete

According to the online Oxford dictionary, "caught" is the past or past participle of catch. The only relevant meaning in this context I can see is:

2.3 Surprise (someone) in an incriminating situation or in the act of doing something wrong. ‘he was caught with bomb-making equipment in his home’

To imply you should buy insurance as not to buy it would constitute a misdeed I take as rude and threatening. As I said, sales is about politeness and flattery, not threats and misinformation.