Justification excuses for increased premium

AyJaydee

The advice with insurance is to: Not auto renew. Shop around. Haggle.
When I received my the renewal quote that I got from my insurers, Direct Line, for Landlord insurance was £201. A 21% increase in the previous years premium of £166, I swung into action.

So I shopped around (all the usual sites) and everywhere I looked was more than this figure.
Going back to looking at the Direct Line website, I entered for a new quote, using a different e-mail address and I got a figure of £133.  Unfortunately, I omitted to save the quote, or get the quote number in the photo that I took of the screen.

Ringing up Direct Line, I, very nicely, asked about my quote.  I was told that the reason for the premium increase was threefold:
1. Building costs had gone up, so they increased the estimated cost of rebuilding the property.
2. One of my neighbours, did not say who, had claimed for a break-in to their property.
3. There was a flood risk.

Well I could not challenge the rebuilding cost, but I did the other two.
I indicated that being a coach-house, all the residence, and hence windows, are on the first floor. The only thing at street level is the front door, which is a modern multi point locking door. This makes my property safer from break-in than my neighbours.
The Government website rates my property location as being 'Low risk of flooding'. Indeed it has never been flooded in it's 18 years. The nearest river course is about half a mile away.
I was told that they do not use this data, they use their own figures.

Since I had not saved my 'new' quote, the call handler offered to do one over the phone. It came back with a premium of £171, which I felt was not so unreasonable, so I accepted it.

However, in this tale, I am curious to know what absurd excuses other people have been given for a premium increase and how did they challenge this?

Thank you

DullGreyGuy

See https://www.abi.org.uk/news/news-articles/2024/4/weather-damage-insurance-claims-worst-on-record/

36% increase in weather related claims
20% increase in Escape of Water
15% increase in theft claims
11% increase in AD claims

Add to that underwriting losses for a couple of years in a row and a 21% increase suddenly doesn't sound too bad. 


Contact centre agents have a system that doesn't look that different to the insurers quote and buy website. They have no more idea than you do why prices have changed year on year. Unfortunately most try to be helpful and speculate on the general reasons and inflation plus the above claim stats can be a good set of reasons but there can be other reasons that neither you nor I know... it can be that they want to shrink their book of LL policies so increase prices to get people to buy elsewhere but on the basis its still your cheapest quote that seems unlikely on this case. 

dunstonh

1. Building costs had gone up, so they increased the estimated cost of rebuilding the property.
2. One of my neighbours, did not say who, had claimed for a break-in to their property.
3. There was a flood risk.

Pretty much everyone who has attempted some building work post COVID knows that building work inflation has gone up much higher than the headline rate of inflation.

I'm surprised they haven't mentioned the 2022 drought, which saw significant increases in movement and subsidence and increased flooding from the wet periods.   Climate change, along with poor planning decisions and population increase, is taking its toll.

I indicated that being a coach-house, all the residence, and hence windows, are on the first floor. The only thing at street level is the front door, which is a modern multi point locking door. This makes my property safer from break-in than my neighbours.

Direct Line are not pricing you specifically.   They have a catchall style policy. If you want more bespoke pricing, then you need to look at other providers that do that.

BarelySentientAI

dunstonh said:

Direct Line are not pricing you specifically.   They have a catchall style policy. If you want more bespoke pricing, then you need to look at other providers that do that.

A point which many people forget.  "I'm a safer driver than other people", "my house is better secured than next door", and "I take better care of my possessions" are not factors in mass-market underwriting pricing.

DullGreyGuy

BarelySentientAI said:

dunstonh said:

Direct Line are not pricing you specifically.   They have a catchall style policy. If you want more bespoke pricing, then you need to look at other providers that do that.

A point which many people forget.  "I'm a safer driver than other people", "my house is better secured than next door", and "I take better care of my possessions" are not factors in mass-market underwriting pricing.

Im a safer driver and I take better care of my possessions are both highly subjective statements and will not be considered under any underwriting process. 

I could in principle see there being a potential argument for relative risk assessment like the fact all your neighbours have a Steinway piano visible through their front windows whereas you have a £50 Casio keyboard. Having seen many surveyors reports I dont recall any commenting on neighbour's property in terms of security or visible possessions etc. The second problem is that the insured would never know if the neighbour cancelled their monitored alarm or replaced their $1m piano with a "genuine fake" or replaced their windows with bullet proof glass (as a cousin did after a dozen smash and grab events in his studio)

AyJaydee

On balance, the figure that I accepted may not be unreasonable.  However, I was somewhat curious over the nonsensical reasoning given to me.  So I have mailed Direct Line, asking for their reasoning.  I'll probably not get a reply, but it will be interesting if I do.  I just cannot stand back and accept this 'premium walking', it needs to be challenged.

k12479

AyJaydee said:

2. One of my neighbours...had claimed for a break-in to their property.

I indicated that being a coach-house, all the residence, and hence windows, are on the first floor. The only thing at street level is the front door, which is a modern multi point locking door. This makes my property safer from break-in than my neighbours.

While your house may be more secure than your neighbours, if crime is going up in your area your risk of being a victim will also increase.

DullGreyGuy

AyJaydee said:

On balance, the figure that I accepted may not be unreasonable.  However, I was somewhat curious over the nonsensical reasoning given to me.  So I have mailed Direct Line, asking for their reasoning.  I'll probably not get a reply, but it will be interesting if I do.  I just cannot stand back and accept this 'premium walking', it needs to be challenged.

How prices are calculated are highly commercially sensitive and a relatively small number of people in the organisation have access to it. For everyone else it's a black box that you put in the answers in and it simply gives a premium out. Most staff won't even realise that the box sources other data than what they enter in and uses that as part of the rating system.

You are free to ask about premiums just dont expect a meaningful response. 

AyJaydee

I spoke to a neighbour about this yesterday and when I told him about an increase in premium on the grounds of a local break-in, what he said was most interesting.

He told me that (1) the break-in was on the far side of the estate, not a near neighbour
(2) It was in one of the apartment blocks, not a private house, where the young people/students tend to live.

Perhaps time to have another conversation with Direct Line...

dunstonh

(1) the break-in was on the far side of the estate, not a near neighbour

Post code is what matters.  Some insurers will only use the first four digits. Some will use the first five.

(2) It was in one of the apartment blocks, not a private house, where the young people/students tend to live.

irrelevent.

user1977

AyJaydee said:

It was in one of the apartment blocks, not a private house, where the young people/students tend to live.

So what? Crime is crime. If you disagree with one insurer's assessment of the risk, there are plenty of others to choose from.