Lloyds bank home insurance

lolaparker

I have had a Lloyds bank home insurance buildings and contents policy for over 25 years- originally purchased in branch through an advisor.

the premiums have crept up each year and whilst I always telephone on renewal, and they do offer me a discount ,This years premium was £814..

I went onto the Lloyds bank website and got a quote , as if I was a new customer, and it came out at £371! When  I phoned Lloyds home ins they confirmed that yes the cover and policy was identical to my existing policy but no , they couldn’t offer me this price because “ it’s an online only price “ WHAT? A huge difference of over £400 ?

I was advised to cancel my existing policy and take out the new policy online, which I did , but what if I couldn’t go online? I would have continued to be ripped off …

I fully appreciate online quotes are always going to be cheaper but the huge difference seems outrageous to me …

Sandtree

New customers, across all channels, receive significant discounts which are unwound over a couple of years. This practice is becoming illegal from Jan next year.

Its common for pricing to be different by distribution channel with aggregators (eg confused.com) being the cheapest and in person the most expensive. In some cases however optional extra defaults and actual cover/excess are also different which can in part explain the pricing differences in headline numbers.

Channel differentiation will continue to persist after the changes in Jan

TELLIT01

I had a similar situation with Lloyds a few years ago, with a similar difference.  I phoned to query it and they offered a 10% reduction.  The lady I was speaking to actually said "I assume you will not be renewing". 

user1977

Why are you staying with lloyds? Haven't you shopped around? 

dunstonh

I have had a Lloyds bank home insurance buildings and contents policy for over 25 years- originally purchased in branch through an advisor.

Lloyds bank have never employed advisers on general insurance.  They used normal bank clerks to retail their product.

I went onto the Lloyds bank website and got a quote , as if I was a new customer, and it came out at £371! When  I phoned Lloyds home ins they confirmed that yes the cover and policy was identical to my existing policy but no , they couldn’t offer me this price because “ it’s an online only price “ WHAT? A huge difference of over £400 ?

It wont be identical.    Yes, the sum insureds may be the same and what it principly covers would be the same or similar but the product Lloyds were selling over 25 years ago would be different to today.

Over 25 years ago that could be the old Lloyds Bank Value Protect policy.  That was a Sun Alliance plan.   However, the old LBIS Home Insurance policy was still available whilst Value Protect was being sold (mainly for those that didnt qualify under Value Protect).   Then there is the BIQs service.  These were arranged by the general insurance officer (GIO) for the branch and was not available in all branches initially.  That effectively was a remote brokerage service where a policy was arranged on a one off transactional basis using the likes of Zurich and a half dozen others.  They handled the renewals and the branch never heard about it again.

I was advised to cancel my existing policy and take out the new policy online, which I did , but what if I couldn’t go online? I would have continued to be ripped off …

It's not a rip off because they clearly gave you the price and you had the option to pay it or not.     Old plans no longer offered often go up in price over time because the administration of old policies on old systems becomes more expensive as fewer people hold them each year.  A system that may have had over a million policyholders on it when the plan was available back in the 90s may only have a few thousand now.  The cross subsidy pool gets smaller as well.     Often the profit on these old plans is lower than the cheaper plans despite the big premium difference.

Some of the increase may also be from the underlying insurer trying to encourage you to not renew the policy as they take a fairly passive approach to putting you off renewing to allow them to eventually close the plan down to the small number left that still have it.

If you do not have online access, then you have plenty of options.  You have your local brokers, IFA firms and mortgage advisers who can do it (often coming to your home or you going to their local office).   You have the telephone providers/brokers as well.

I fully appreciate online quotes are always going to be cheaper but the huge difference seems outrageous to me …

Actually, online is not always cheaper.  Many of the local brokers, IFAs and mortgage advisers have very efficient quotation services nowadays that has cut the size of difference right down.

Sandtree

dunstonh said:
It wont be identical.    Yes, the sum insureds may be the same and what it principly covers would be the same or similar but the product Lloyds were selling over 25 years ago would be different to today.

Over 25 years ago that could be the old Lloyds Bank Value Protect policy.  That was a Sun Alliance plan.   However, the old LBIS Home Insurance policy was still available whilst Value Protect was being sold (mainly for those that didnt qualify under Value Protect).   Then there is the BIQs service.  These were arranged by the general insurance officer (GIO) for the branch and was not available in all branches initially.  That effectively was a remote brokerage service where a policy was arranged on a one off transactional basis using the likes of Zurich and a half dozen others.  They handled the renewals and the branch never heard about it again.

Many insurers will renew customers on the latest terms rather than persist the previous terms and conditions, this can also include changes to the underwriter. Any material changes have to be called out in the renewal notice, rather than expecting the customer to read the booklet and spot the differences.

A minority persist old terms but given the headache this creates for capital modelling etc its certainly a small minority.