Best Home Insurance Quote – Does the Cheapest Mean the Best?
Thousands of UK home owners each month type in the phrase ‘best home insurance’ into search engines. But will they necessarily find the best home insurance products that meet their insurance needs? Does ‘best’ necessarily mean the ‘cheapest’ home insurance? In the United Kingdom standard contents and home insurance products are primarily marketed on price. Insurers rarely stray from the price formulae in their TV adverts, although their are one or two exceptions that sell on the fact they consider their home insurance to be of superior quality. Most home policy wordings cover a similar range of perils, so the superior terms of a contract could possibly be measured by it’s inclusion of certain ‘peripheral’ insurance covers or an excellent claims service. Most home owners are looking hard at saving money on the household expenditure they feel they cannot do without. Any home owner with a mortgage is required to have adequate buildings insurance in place, to cover the cost of the rebuild in event of a disaster. Now the credit crunch and recession is prompting more people to seek cheaper providers for annual costs.
If you browse through the top 10 or 20 websites generated, after typing in the key phrase ‘best home insurance’, you will find very well-known household website names. Nearly all of them are price comparison websites or policyholder review based websites. Of course no one expects Google’s clever algorithm to provide ‘sound financial advice’. However ironically the vast majority of people now go online to find the best home insurance policy will end up buying something. Many do not seek financial advice from an insurance broker. Most are presented with thousands and thousands of search results to wade through. More money is spent on online advertising than TV advertising in the UK. The marketing message is simple and clear. ‘Save time by comparing a wide range of insurers, across a huge number of policies, to find the cheapest home insurance deal possible’.
It would be difficult to argue against the fact that the results presented across comparison search engines, rank policies by price and deals shown can often be cheap. But does it make those policies better? The challenge with contents and home insurance products advertised on the Internet, is that the advertising standards are much more difficult to monitor and regulate. Many smaller insurers can quite easily ‘bid’ for any given ‘search term’ they feel matches their marketing strategy – regardless of whether or not that particular product is fit for any given purpose. If the customer requests a quotation after reply to an online advertisement, it is up to the product provider to make sure their demands and meets are addressed and a suitable product is offered. Of course all insurance advertising is regulated by the FSA. Yet the fast-moving nature of online advertising means that shoppers, visiting a range of different websites, and clicking through from ‘sponsored links’, could easily find themselves at a webpage, without even realising how they got there.
Lets assume for a moment that all home insurance policy wordings for all providers are exactly the same. Then of course it would be a simple task of choosing the cheapest. Of course most homeowners realise that individual policy features of all the U.K.’s leading providers differ slightly. It is these subtle differences which may make a huge impact on homeowners interpretation of what is ‘best’ for them. Some homeowners are quite happy clicking on the cheapest product, without really bothering to read too much of the small print. Others are incredibly risk averse, and perceive what is’ best’ as making sure they sign up for every extra feature and cover available. So let’s highlight a couple of key policy differences, that can be all too easily skimmed over, at the click of a mouse:-
- Excess Levels - there are different levels for both buildings and contents, which can allow policyholders to decide how much cost they would like to bear themselves, in the first part of any future insurance claim. By setting a high level of excess, a cheaper quote can be secured. But what if you have a couple of unfortunate claims in that year?, perhaps it would have been ‘better’ to be a bit more conservative for extra peace of mind?
- Sum Insured – it is possible to reduce contents sums insured if you feel you’re currently over insured. Many people accept combined buildings and contents policy with a maximum level of contents, which perhaps vastly outweighs the value of the fixtures and fittings in their home. Likewise many people may not realise that they have not accurately valued all their possessions and may need to increase cover as a result. A slight ‘tweaking’ of the online quote wizards can result in a sharp increase in premiums. Regardless of what’ features & benefits” you are offered by an online home insurance quote, you should have a clear understanding of the full replacement cost of your belongings. This is fundamental to making sure you are purchasing cover which is suitable for your needs.
- Number years claims/ % discount – if you’re savvy you may be able to find a better policy that offers risk related discounts, based on the number of claims free years you currently possess.
- % Levels of ‘Buy Online’ Discount - there can be huge gains from switching. Many online only discounts are offered if you are prepared to do everything online – including buying with your credit card. Is it ‘better’ to buy in this way without seeking any advice? If you don’t really understand all policy wordings on a ‘cheap offer’, maybe it is worth considering an alternative ‘better’ policy where you understand all the small print?
- Optional Extras – it’s easy to remove covers for optional extras you think you won’t really will need to save money. For example many homeowners have already got a warranty on their boiler, and so may not require a ‘home emergency breakdown’ type option.
Ultimately these examples highlight an obvious difference in people’s attitudes to risk and reward. Everybody is different. If you pay a close attention to what you read on the Internet – so are home insurance policies.
For a Home Insurance Quote contact Assetsure. We are able to offer insurance for a wide range of UK property types including nonstandard construction.