Home Insurance - single occupancy increases the renewal quote?

EnquiringMind33

Sorry if it's a stupid question or has been asked before, but...

Whilst checking my home and contents insurance today, which is due to renew in a week, I discussed my existing quote (valid up to and including the renewal date) by phone with the insurers.

I've been with them for 3 years and in the "your answers to questions we asked" section, I'd spotted that it said "this is your main home and is lived in by you and your family". I've lived alone since I've been with them, and would have said so when asked. In case they misunderstood me 3 years ago, I mentioned it, thinking they must say this for my situation as well as for family occupancy. The insurance rep wasn't sure, so tried deleting the words "and your family". It updated and increased the quote by 40%!

Does that seem usual? I can understand some effect, as it may suggest the house might have nobody home more often, but I can't find anything online about this so far, and it's a big rise. The insurance guy seemed shocked too!

The 13 days between today's quote and the previous one may be a factor too, but I looked into that online, and any increase from the delay seemed pretty small..

Robin9

My policy has two specific questions:

1) How many persons over 18

2) How many under 18


We are 2 over 18 -  my renewal (next month)   £212 (up from last years £172)

user1977

I wouldn’t interpret “lived in by you and your family” as meaning that you must have additional (and unquantified!) family members resident for the policy to be valid, it’s more aimed at checking the place doesn’t also have residents who are not in the same household as you.

EnquiringMind33

Robin9 said:

My policy has two specific questions:

1) How many persons over 18

2) How many under 18

We are 2 over 18 -  my renewal (next month)   £212 (up from last years £172)

Thanks. Annoyingly, I can't find a way to see exactly what the questions I was asked on this topic 3 years ago were (my soon-expiring policy had a 3-year fixed price, guaranteed not to go up), but I think they were similar to what you say here. I see some comparison sites ask you to say how many adults and children live in your property, which I guess is a roundabout way of also telling them if you live alone, though it might not actually bother them either way, for all I know. Maybe it makes a difference to some insurance companies. I have a  feeling that it could be an accidental inflation of the quote in my case, so I'm going to check further with them before renewing, that's for sure, and look elsewhere if necessary.

EnquiringMind33

user1977 said:

I wouldn’t interpret “lived in by you and your family” as meaning that you must have additional (and unquantified!) family members resident for the policy to be valid, it’s more aimed at checking the place doesn’t also have residents who are not in the same household as you.

Thank you - I'd never interpreted it that way either, for just the same reasons you mention. Definitely going to look into this further with them before renewing, as it feels odd.

Auti

My house insurance increased because of now only one adult in the property (and child) instead of 2. Reason given was house empty more and less people to spot problems. Standard practice apparently. 

EnquiringMind33

Auti said:

My house insurance increased because of now only one adult in the property (and child) instead of 2. Reason given was house empty more and less people to spot problems. Standard practice apparently. 

Thanks - that makes sense (even though I don't feel it's necessarily correct for them to view it that way, at least not so harshly). I checked with my insurers this afternoon and they confirmed that they view one adult as more of a risk than two (or more, as long as they're all close family). The weird thing is that the edit to reflect single occupancy caused this quite large rise in the premium of their more basic policy (to which I'd added some options so it has quite similar cover to their other, more all-inclusive policy), yet the same occupancy change actually made their dearer policy's quote go DOWN a little! So the cost of the two quotes has got quite close because of the big rise in the cheaper one and the small fall in the dearer one!

DullGreyGuy

Consumer insurance isn't based on logic but statistics... the maths says single occupancy buildings either have more claims or worse claims and so premiums are increased. Insurers typically don't really try to workout the "why" as it's irrelevant. 

Rating factors can often compound each other hence a hot hatch in the hands of a teenager is much worse than in the hands of a 40 year old. However a hot hatch in the hands of a 40 year old is worse than a £100,000 GT and if you want to analyse why, maybe its the type of 40 year olds that want a R-Type maybe still think they are a teenager. With the volume of data personal lines insurers have they can study the correlations between many different factors and claims. 

Some things on the surface seem counterintuitive, as per the expensive car above or that a very high excess increases premiums but then you're into what types of folks choose high excesses and negative selection. Those that undervalue their goods can be seen as a potential sign of financial distress and so a fraud risk. Those that buy the top of the line policy would appear to value their property and so maybe take better care of it and can afford to do maintenance etc. 

user1977

Auti said:

My house insurance increased because of now only one adult in the property (and child) instead of 2. Reason given was house empty more and less people to spot problems. Standard practice apparently. 

But had they asked you specifically how many adults/children lived there?

EnquiringMind33

DullGreyGuy said:

Consumer insurance isn't based on logic but statistics... the maths says single occupancy buildings either have more claims or worse claims and so premiums are increased. Insurers typically don't really try to workout the "why" as it's irrelevant. 

Rating factors can often compound each other hence a hot hatch in the hands of a teenager is much worse than in the hands of a 40 year old. However a hot hatch in the hands of a 40 year old is worse than a £100,000 GT and if you want to analyse why, maybe its the type of 40 year olds that want a R-Type maybe still think they are a teenager. With the volume of data personal lines insurers have they can study the correlations between many different factors and claims. 

Some things on the surface seem counterintuitive, as per the expensive car above or that a very high excess increases premiums but then you're into what types of folks choose high excesses and negative selection. Those that undervalue their goods can be seen as a potential sign of financial distress and so a fraud risk. Those that buy the top of the line policy would appear to value their property and so maybe take better care of it and can afford to do maintenance etc. 

Thanks! All very good points and I certainly understand the logic, though statistics have a nasty habit of not serving individuals well, as we all know. For example, the point in your first paragraph is perfectly logical and I can see why it would affect me, except that I've never claimed! Of course, I appreciate that this makes no difference whatsoever to the overall statistics the companies look at, it just makes me feel hard done-by, which is not their problem, just mine!

DullGreyGuy

EnquiringMind33 said:

DullGreyGuy said:

Consumer insurance isn't based on logic but statistics... the maths says single occupancy buildings either have more claims or worse claims and so premiums are increased. Insurers typically don't really try to workout the "why" as it's irrelevant. 

Rating factors can often compound each other hence a hot hatch in the hands of a teenager is much worse than in the hands of a 40 year old. However a hot hatch in the hands of a 40 year old is worse than a £100,000 GT and if you want to analyse why, maybe its the type of 40 year olds that want a R-Type maybe still think they are a teenager. With the volume of data personal lines insurers have they can study the correlations between many different factors and claims. 

Some things on the surface seem counterintuitive, as per the expensive car above or that a very high excess increases premiums but then you're into what types of folks choose high excesses and negative selection. Those that undervalue their goods can be seen as a potential sign of financial distress and so a fraud risk. Those that buy the top of the line policy would appear to value their property and so maybe take better care of it and can afford to do maintenance etc. 

Thanks! All very good points and I certainly understand the logic, though statistics have a nasty habit of not serving individuals well, as we all know. For example, the point in your first paragraph is perfectly logical and I can see why it would affect me, except that I've never claimed! Of course, I appreciate that this makes no difference whatsoever to the overall statistics the companies look at, it just makes me feel hard done-by, which is not their problem, just mine!

The fact you haven't claimed will be factored in too but the majority of claims made each year are by people that haven't claimed in the last 5 years. 

When I did Motor claims our claims reference number was simply the policy number followed by a slash and a sequential number. So /1 for the first claim they've had with us, /2 for the second etc. Policy numbers didnt change if they renewed so it was a total claim count not just a this year claim count. 99% of the time you listened to the 12 numbers of the policy number and automatically typed /1 at the end... in the remaining 1% of cases you then look confused because its a claim from 10 years ago or was a fire claim etc (I dealt with liability and injury so rarely fire) and then you realise the customer had said /2 or /3... only remember one old boy that had a /5 and never saw higher. 


Statistics are what they are, if you understand them you can try and use them to your advantage, if you don't consider them then you can pay over the odds. Home insurance for example can be written either on a sums insured basis where you say your stuff is worth £50,000 or a "bedroom rated" where all customers get a £500,000 limit and instead its priced on the number of rooms (used to be just bedrooms, hence the name, but now they consider other rooms too). 

Some like the simplicity of a blanket high limit, no longer have to faff about adding up the values of your CDs etc. However these policies naturally better suite those with a higher than average contents and if you have £30,000 of stuff in a 4 bed home you are probably overpaying on a bedroom rated. You may think its worth while for the time it saves which is fine but others won't realise as they don't shop around etc (something I'm guilty of for Home but driven by how others deal with Personal Possessions cover)