Does the choice of home insurance provider matter or choose the cheapest?

kaboo

Hi everyone,
I am a recent first time home owner, we bought are first home last year. And with the whole rush of getting things done within the stamp duty deadline, we could not carefully select every policy/product. We went with the home insurance recommended by our mortgage advisor - Legal & General, it seemed a bit higher but it was with a reputed provider, we did not have time to shop around, and our mortgage advisor was very helpful with everything else - so we went with her advice and got the insurance with Legal and General. Now it is the time for renewal. I have a quote from our Mortgage Lender who also do a home insurance product and we get a 25% discount being mortgage customers - this would be with Nationwide. Then we have the option of multi-policy with Admiral with whom we have our two cars insured.

Legal & General have lots of extras in the basic policy, if I add all of these as extras in Nationwide and Admiral, the Nationwide comes to be a like £60 cheaper than Legal & General, and Admiral comes out to be further £30 cheaper than Nationwide. 

So my question - does it matter which insurance you choose? I dont mind going with Legal & General if they are definitely better, but if they are going to be all the same at the end of the day then why spend extra. For Car insurance I have never bothered too much picked the cheapest, but with home/property a lot more is at stake! 

I could use your thoughts in deciding. Cheers!  

[Deleted User]

I'd never go purely on price. You need to make sure the cover meets your needs.

You may also want to consider the customer service aspect, especially claims.

dunstonh

Does the choice of home insurance provider matter or choose the cheapest?

Absolutely it matters.   Home insurance policies are not the same.   You get massive differences in the quality of coverage and options.  It can be very short-sighted to go with the cheapest.  Indeed, potentially enough to bankrupt you in extreme cases.

If you are dealing in the mass middle-ground market then there will be similarities but sufficient differences that you should look at what those differences are.

PRAISETHESUN

Just because two policies cost the same, doesn't mean they provide the same cover the event you need to claim. Some might have higher excesses, some might have lower limits for certain categories of claims, etc. In many instances, yes, you do pay extra for good customer support, which may decide is invaluable in the event your house burns down and you need to get things sorted with minimal stress. Ultimately, only you can decide what's important to your circumstances and if a particular insurer's offering is suitable for you.

Definitely worth shopping around at renewal time though. The new customer deals aren't as lucrative as they used to be, but it's still a good opportunity to get a good deal elsewhere, or haggle down the price with your current insurer if you want to stay with them.

Sandtree

You have two aspects to consider....

1) Quality of the product
2) Quality of the service

Home insurance is relatively complex and you can get massive differences in the level of cover provided... You have some very unusual kitchen that's discontinued and damage one cabinet beyond repair. Budget insurer pays you £350 which was the list price of the unit last time it was sold, the fact you cannot buy a replacement is your problem. A top quality policy would look to getting one made bespoke for you and if that isn't possible will cover the cost of replacing all the units so they continue to match... if this means you dont have a working kitchen for a couple of days then they'd pay for you to stay in a hotel etc whilst the home is technically uninhabitable

Service is much more difficult to predict and ultimately there is always going to be an element of luck... in the worst storms for 300 years all insurers will struggle getting roofers etc. 

Personally, my choices are limited because of some of our contents unless I want to pay a 4 figure sum for mid net worth policy but even before that I'd stick with names I know, and by that I am equally interested in the underwriter and not just the name on the front. I personally prefer to have a UK based insurer rather than Gibraltar (as Admiral Home is) or other havens. I like multiple options of contact rather than be forced to use email (even if that's my preferred method most the time).

Not everyone needs a gold plated policy though and just because I choose a company as its got a £12k single article limit doesn't mean its worth paying the extra for someone else who's most expensive possession is sub £1,000

kaboo

Thank you, and it makes sense. £60 more expensive is definitely not so much more considering I am looking to protect my life's savings in the form of my family home! So things to check: Coverage for contents and building if there is a limit or unlimited, excess, look for specific categories like accidental damage, keys&locks, contents in garage. 

Anything else that I should not miss? 

Sandtree

kaboo said:

Thank you, and it makes sense. £60 more expensive is definitely not so much more considering I am looking to protect my life's savings in the form of my family home! So things to check: Coverage for contents and building if there is a limit or unlimited, excess, look for specific categories like accidental damage, keys&locks, contents in garage. 

Anything else that I should not miss? 

Inner limits, particularly around things like "valuables" and what they define as "valuables"... traditionally its precious metals, jewellery, watches, art but some budget policies inc technology in there too. What the single article limit is, anything above this has to be individually specified. What cover outside the home you want.

Outside of that there are the considerations of if you want "matching set" cover... as per the kitchen example above, without it you can be left with odd tiles etc but not everyone buys everything matching. Trace and Access is another common coverage that's discussed a lot... basically to find source of leaks.

kaboo

Sandtree said:

Inner limits, particularly around things like "valuables" and what they define as "valuables"... traditionally its precious metals, jewellery, watches, art but some budget policies inc technology in there too. What the single article limit is, anything above this has to be individually specified. What cover outside the home you want.

Outside of that there are the considerations of if you want "matching set" cover... as per the kitchen example above, without it you can be left with odd tiles etc but not everyone buys everything matching. Trace and Access is another common coverage that's discussed a lot... basically to find source of leaks.

Thanks, thats helpful. Kitchen not so worried at the moment, because we have invested most of our money in buying our first home, we will need to save up for a while to get the renovations/remodelling - thats when I will think about this feature - definitely good to know.

Trace and access sounds very important, especially in an old building like ours. So will look into this.

In terms of valuables its mainly computers, camera and a couple of telephoto lenses. There are a couple of jewellery items which I know are valuable but exactly how much I dont know. They were handed down by our parents or gifted to us 10-15 years back. So I am thinking of getting them valued by a jeweller! Does that make sense?  

Sandtree

kaboo said:
In terms of valuables its mainly computers, camera and a couple of telephoto lenses. There are a couple of jewellery items which I know are valuable but exactly how much I dont know. They were handed down by our parents or gifted to us 10-15 years back. So I am thinking of getting them valued by a jeweller! Does that make sense?  

In traditional policies those wouldn't be valuables its only more modern/budget products that have expanded the definition.

Getting valuations can help both ensure you aren't underinsured (which is much bigger issue than you imagine) and ensuring claims are settled without too much faff. My experience of valuations however is that costs vary massively and some charge a not insubstantial percentage of the valuation as the fee with a minimum floor... make sure you understand the costs before commissioning the work!

Matching sets apply to contents too... matching dining table and chairs, sofas etc, jewellery, electronics etc

t1redmonkey

I do find the whole home insurance scene very confusing as well, if you go on price comparison websites you'll see lots of names but a lot of them are actually underwritten by the same company and are similarly priced and have similar features.  Then it makes me wonder what the difference actually is between them.  I'm guessing it's just the customer service team you deal with.

Sandtree

You first of all need to understand the different sellers of insurance... brokers, MGAs, insurers... layer on top of that the fact you get white label deals (high street brands adding their names to policies) and you get different levels of delegated authority if you are dealing with a company other than the insurer.

A broker for example has a choice, depending on their size... they could go round the insurers and MGAs and ask them to put their standard product onto their panel and so each quote they give potentially has different T&Cs attached and another broker may be offering the identical product at similar pricing. Alternatively they could create their own T&Cs and ask the MGAs and insurers to price for it in which case their product is "unique" and their terms consistent irrespective of the underwriter. I say "unique" as the fundamentals of Home insurance dont vary that much.

Whoever you buy from is who you will typically be dealing with for customer service matters (change of address, change bank details etc) - obv considering white labels isn't a provider. For claims you are more likely to deal with the insurer or their outsourcer but some brokers and even more MGAs have authority to deal with claims up to certain values.