Home Insurance - Burglar Alarm Clause

Wagnerman

I have had the same buildings and contents policy for 25 years. I won't name the company as I have an ongoing complaint and do not wish to prejudice the outcome. I originally took the policy out in 1996 with company X. I disclosed that I had an alarm system under an annual maintenance contract. I was given a discount and a clause was included in my policy that I would not be covered for any loss if the alarm was nor set at night or when we  were out. I would also not be covered if I did not continue with the maintenance contract. This was fine for me as the alarm contract was relatively cheap. The insurance company X was taken over about 15 years ago by company Y. The clause remained in my policy and I continued to pay for the alarm contract as I was under the impression I was receiving a discount on my insurance. I was not advised otherwise. 

As each year went by both insurance and alarm policy premiums increased. I usually negotiated a lower premium with the insurance company but the alarm company would never come down on their price. This year the alarm policy reached a ludicrous level and I decided enough was enough. I contacted my insurer and asked how much my policy premium would increase if I was treated as not having an alarm. I was told that I did not receive any discount for having an alarm and had not done so for many years. I said I felt this was unfair as I had the clause in my policy regarding the maintenance contract. Why should I have to pay for an alarm contract and yet someone without an alarm only paid the same insurance premium as me? As a result of my complaint the clause was removed without any increase to my premium. As a result of this I was able to cancel my alarm contract and save that cost. It occurred to me that I had only been paying the alarm contract because of the clause in my insurance policy. My Brother in Law is a qualified alarm engineer and can service/repair the system at a much lower cost. I estimate that over the years I have paid out over £1,500.00 simply because of the unnecessary clause in the policy. I feel unfairly treated by the insurance company as I consider the onus was on them to tell me that my policy was not being discounted for having an alarm at the time they stopped giving the discount. The clause should also have been removed from my policy at that time. I do not feel there was any onus on me to ask them each year if I was still getting a discount. Their pricing should have been more transparent.

I am currently in correspondence with the insurance company and intend taking the matter to the Financial Ombudsman if appropriate. I will be grateful if anyone else has found themselves in this position and has some advice to offer. No doubt I will be in for a long haul with the insurance company. I have, in fact, taken out insurance with another company at around half the price. Rather late in the day I have realised that loyalty to an insurance company is pointless as you are simply treated as an ATM.

lisyloo

I think you are incorrect.
if you are doing you own insurance DIY i.e. not using a broker, then it’s up to you to check the policy EACH year.
it not correct for you to assume it’s the same and their duty to inform you of changes.
It’s your responsibility to check the policy is still suitable for your needs each and every year.
i Believe you’ll find this in the letters you’ve received at renewal.

if you’re unhappy you can of course go to the ombudsman, but if you agreed to the contract and the price then I don’t think you have a case.
sorry.

Brie

I would wonder why the insurance company would include a special clause to your insurance that isn't in anyone elses'.  Unless you simply assumed it was there but it wasn't and you hadn't actually looked for that over the last few years.

lisyloo

Brie said:

I would wonder why the insurance company would include a special clause to your insurance that isn't in anyone elses'.  Unless you simply assumed it was there but it wasn't and you hadn't actually looked for that over the last few years.

Err…..this is a standard feature (if you select it)
If you buy a policy on the basis of having an alarm then they expect you to switch it on.

what makes you think it isn’t a standard option?

eddddy

Brie said:

I would wonder why the insurance company would include a special clause to your insurance that isn't in anyone elses'.  Unless you simply assumed it was there but it wasn't and you hadn't actually looked for that over the last few years.

Presumably there was a question on the insurance application form along the lines of:

Do you have a burglar alarm with a maintenance contract which you set at night and when you go out?

And the OP answered 'Yes' - and the OP's answer was noted on the policy along with a condition that any claim would be rejected if the alarm wasn't set.

The OP's complaint is that, in the early years of the policy, that note/condition on the policy resulted in a discounted premium. But in more recent years, that note/condition on the policy didn't result in a discount.

The OP feels that the insurers should have told them that even though that note/condition remained on the policy, it no longer resulted in a discount.

TBH, I'm not convinced that the OP has a strong case.

user1977

Indeed, it's effectively a new proposal each year, and no guarantee that next time a certain fact will make any difference to your premium. Though they'll still ask it, because it might make a difference for other policyholders.

lisyloo

Usually there are questions such as
do you have window locks to certain standards
do you have a certified alarm
is it maintained annually
is it monitored 
etc.

it’s then made clear that you are actually expected to use the alarm (should be obvious) and get the maintenance renewed etc.
these things should be eye wateringly obvious but of course have to be stated clearly in terms and conditions for clarity

yes it’s as you described and I’m confident the OP has no case.
If The OP is doing their insurance DIY then it’s up to the OP to decide which options to select EACH year
if they were using a broker and taking advice I’d expect the broker to run through this with them.
What the insurer decides to give discounts on and how much is subject to change and entirely up to the insurer.
the OP has sadly made the assumption that everything stays the same and that is simply not true
It’s not the insurers obligation to tell you what’s changed outside of a policy year
it’s up to the OP to check what they have selected still meets needs in terms of cover, restrictions and price.
further more I’m 100% confident they would have been told in their paperwork “you need to check this still meets your needs”.

it’s generally always the case that if you claim security devices e.g. immobiliser, window locks, alarm etc, that you are expected to use them. 

So if you claim you have a maintained alarm you need to maintain it
if you claim you park you car in the garage you need to do that
if you claim your alarm is monitored you need to keep the contract
i would have thought that was eye wateringly obvious and not a special or individual term.

Wagnerman

lisyloo said:

I think you are incorrect.
if you are doing you own insurance DIY i.e. not using a broker, then it’s up to you to check the policy EACH year.
it not correct for you to assume it’s the same and their duty to inform you of changes.
It’s your responsibility to check the policy is still suitable for your needs each and every year.
i Believe you’ll find this in the letters you’ve received at renewal.

if you’re unhappy you can of course go to the ombudsman, but if you agreed to the contract and the price then I don’t think you have a case.
sorry.

You miss the point entirely. Of course I know that the onus is on me to check that the policy is still suitable when it comes up for renewal and I did this every year. I have no quibble with the cover I was given. The issue hinges on the fact that when I took the policy out I received a discount for having an alarm and consequently the clause was put in my policy. That is perfectly normal and acceptable practice. At each renewal date I received the policy schedule and a figure for renewal. The figure was not broken down in any way and did not show the level of discount. Given the extent of discounting and negotiation on policy prices which goes on I do not think there is a company on the planet which shows gross and net policy prices. As the clause relating to the alarm was also in the policy I think it only reasonable for me to assume that I was still receiving a discount. If I was not being given a discount surely, again, it is only reasonable for me to expect the insurer to remove the redundant clause or, at the very least, tell me that the discount had been removed. If you are suggesting that I should have contacted the insurer each year to confirm the level of discount, if any, I was receiving then I think that is unreasonable. The position is that the insurer unilaterally stopped discounting for alarms but did not inform me. When an insurer puts a clause in a policy because of a specific situation why should the clause remain if that situation no longer applies as a result of their actions? I believe that there is an onus on the insurer to inform policyholders of such significant changes and, again, only reasonable to expect them to have done so. Thanks for your input but I do believe I have a case.

user1977

Wagnerman said:

lisyloo said:

I think you are incorrect.
if you are doing you own insurance DIY i.e. not using a broker, then it’s up to you to check the policy EACH year.
it not correct for you to assume it’s the same and their duty to inform you of changes.
It’s your responsibility to check the policy is still suitable for your needs each and every year.
i Believe you’ll find this in the letters you’ve received at renewal.

if you’re unhappy you can of course go to the ombudsman, but if you agreed to the contract and the price then I don’t think you have a case.
sorry.

As the clause relating to the alarm was also in the policy I think it only reasonable for me to assume that I was still receiving a discount. 

No, this wasn't reasonable for you to assume. And even if it were reasonable for you to assume, it doesn't mean the insurers are liable to pay you anything. They have charged you the correct amount for what you stated on the proposal form. The fact you also chose to have a maintenance contract for the alarm is your own affair - and you have of course had the benefit of a maintained alarm - I can't see any argument that the insurers are meant to indemnify you against that cost.

Wagnerman

lisyloo said:

Usually there are questions such as
do you have window locks to certain standards
do you have a certified alarm
is it maintained annually
is it monitored 
etc.

it’s then made clear that you are actually expected to use the alarm (should be obvious) and get the maintenance renewed etc.
these things should be eye wateringly obvious but of course have to be stated clearly in terms and conditions for clarity

yes it’s as you described and I’m confident the OP has no case.
If The OP is doing their insurance DIY then it’s up to the OP to decide which options to select EACH year
if they were using a broker and taking advice I’d expect the broker to run through this with them.
What the insurer decides to give discounts on and how much is subject to change and entirely up to the insurer.
the OP has sadly made the assumption that everything stays the same and that is simply not true
It’s not the insurers obligation to tell you what’s changed outside of a policy year
it’s up to the OP to check what they have selected still meets needs in terms of cover, restrictions and price.
further more I’m 100% confident they would have been told in their paperwork “you need to check this still meets your needs”.

it’s generally always the case that if you claim security devices e.g. immobiliser, window locks, alarm etc, that you are expected to use them. 

So if you claim you have a maintained alarm you need to maintain it
if you claim you park you car in the garage you need to do that
if you claim your alarm is monitored you need to keep the contract
i would have thought that was eye wateringly obvious and not a special or individual term.

When I received the renewal each year I was not asked any questions at all. I was simply sent a copy of the policy schedule for the following year and a quote. In fact I have the one for this year in front of me now. Yes, I was asked to check that the policy was still suitable and I did so. I was not given a breakdown on price and was simply asked to let them know if anything had changed. From my perspective nothing had changed. I still had the alarm and was using it in accordance with the rules set out in the policy clause. As the clause was put in my policy by the insurer because they were giving me a discount I think it only reasonable for me to expect the insurer to a. tell me that they are no longer discounting because of the alarm and b. remove the clause as it is no longer applicable. I do not think it reasonable for me to have to call the insurer each year at policy renewal time to ask if I an still getting a discount. The insurer decided to change the way they did business by not discounting for alarms and I believe there is an onus on them to inform customers of such a significant change to their processes. 

Brie

lisyloo said:

Brie said:

I would wonder why the insurance company would include a special clause to your insurance that isn't in anyone elses'.  Unless you simply assumed it was there but it wasn't and you hadn't actually looked for that over the last few years.

Err…..this is a standard feature (if you select it)
If you buy a policy on the basis of having an alarm then they expect you to switch it on.

what makes you think it isn’t a standard option?

@lisyloo - only as I've never noticed it before.  Likely as I've never had a burglar alarm.  But I would have thought (obviously incorrectly) that if I did and answered yes to the question that it would have an impact on the premium.

I've always wondered about the locking windows as while ours do have locks available I've no idea where or if there's any keys for them.  (But don't tell the insurance company that please.)  They do however lock in the sense that when fully closed they can only be opened from the inside.   Granted I rarely have all the windows closed.  (I suppose you shouldn't mention that to the insurance company either)