Home Insurance Deals – The Incentives Used by Insurance Companies
As consumers continue to cut back on their household expenditure, many are looking for better home insurance deals to save money. To make their products appear more attractive, many home insurance companies are coming up with a range of deals to tempt home owners to switch provider. Most deals are designed to attract different types of consumers, for different reasons. Sometimes the more novel and innovative the special offer, the more effective the advertising message becomes. Sometimes the sheer stupidity of an advertising campaign, can stick in the minds of consumers.
Perception is Reality – we are all attracted to offers in different ways. Many of us get more excited about the deal itself, rather than the small print of an insurance policy. Sometimes we can relate to the message in the advertising – some specialist home insurers may target specific interest groups, with offers that only apply to that particular group of people. Like all effective marketing deals that aim to save you money, advertisers also need to associate their product with a specific emotional buying need. For instance the security of a trusted provider, or the efficiency of a claims department should a crisis happen, all the comfort people feel with buying a brand that their friends and family also use. Quite simply a ‘deal’ is a reflection of the consumer’s perception of a product and how it will benefit them personally…
Combined Buildings and Contents Insurance – perhaps one of the most widely used types of deals from home insurers, is to offer a special discount should policyholders choose to buy both the buildings insurance and contents insurance together. Policyholders see the simplicity – in that they only have to deal with one insurance company, with one set of paperwork and one claims process – all for one price. Buying a combined policy may not be appropriate for every situation due to the nature of the policy wording, the type of building and the individual situation of the home owner.
Risk Related Discounts a risk related discount is usually advertised by offering a percentage off the normal premium, for customers who can prove they have not made any previous claims in the past. Policyholders that have made many claims in the past, are deemed by insurers’ to more likely to make them again in the future. If this type of home insurance deal is ongoing, policyholders know that by not submitting very small claims, they may be able to secure this additional discount at renewal time.
Cash Back Offers – some companies are simple cash amount or ‘cash back’, after you have switched to their home insurance product. Most extend this ‘thank you’ amount every year upon renewal, as long as there has been no home insurance claims. Always check the small print of the deal. Many such offers will only pay out cash back following a minimum period during which the policy is not cancelled. You could argue that getting some cash back is no different from receiving a big discount in the first place. However many consumers perceive that they have acquired something, which they might not have ordinarily received had they not switched provider in the first place.
Online Only Offers– some companies are offering cheaper home insurance deals when you buy online, as opposed to buying over the telephone. The logic to this is fairly simple – the unit cost per sale is much lower in an online automated process, when compared to the cost of employing a call centre operator. Call centre operations can be incredibly expensive as they involve highest staff turnover rates, the costs of infrastructure such as desks, computers and telephones. However with an online ‘click and buy’ process, there is very little overhead per sale. Some people may feel slightly uncomfortable making an important financial buying decision, without first speaking to a representative of the home insurance company. Many deals are restricted to ‘new business’ customers only – and specifically exclude existing policyholders.
Extra Months for the Price of 12 – some deals now aim to market the number of additional months provided free, for the price of 12. It could be argued that this is no different from a discount. However consumers perceive they are achieving greater security for a longer period. They want the comfort of knowing they are achieving some sort of deal. One of the primary objectives of most home insurance is to maintain the book of ‘renewals business’. Therefore these types of ‘loyalty deals’ are extremely popular amongst the most of the major home insurance companies.
Shopping Points – some are home insurance deals are based upon receiving a certain number of ‘shopping points’ when policies taken out. As millions of UK consumers already collect popular brands of supermarket points, this is perceived as quite an appealing offer. Many are aware of the real ‘value’ of a shopping point, and how and where it can be spent. In many cases the value of shopping points goes up per point, should they be redeemed in the course of spending even more money in a shop. This helps the retailer generate future business. While consumers are comfortable in the knowledge they are likely to make repeat purchases for fast moving consumer goods anyway.
Extra Covers – some home insurance deals are marketed upon providing additional covers or comprehensive levels of cover for specific purposes. For instance one of the popular additional options is sometimes legal expenses cover, which provides useful liability protection for homeowners concerned about the cost of being caught up in some form of future legal dispute. Different insurers covers vary and so you should aim to put your insurance needs above any special offers, freebees or discounts.
For a Home Insurance Quote contact Assetsure. We are able to offer insurance for a wide range of Uk property types including nonstandard construction