More Home insurance Policyholders Planning to Switch
In good times many home owners do not bother switching their home insurance provider because of the hassle and time it takes to retrieve alternative quotes from alternative home insurance providers. However in harsher economic conditions many more people are now seeking out cheaper buildings and contents insurance. According to Allianz UK research, up to 70% of the UK population intends to reduce their financial outgoings, due to worries about their future personal security. Of those people over half have identified that there household insurance bills are one area where they can make real savings by switching insurance provider.
Online comparison websites did not exist during the recession of the early 1990s and so the process was more paper driven and time-consuming in those days. This discouraged switching on an annual basis. Today’s savvy Internet consumers are quite comfortable shopping around and comparing prices online. The research found that of those 70% of people intending to make savings almost 30% had already achieved this by switching either their car insurance or home insurance policies.
The report also found 9% of those policyholders were reducing the level of cover they have enjoyed in their existing insurance policy in order to reduce their annual premium downwards at renewal time. These included removing optional extras such as the ability to have legal expenses insurance or a free courtesy car in the event of a claim for an accident. Another way to reduce the online quote price is to reduce the levels of access on the policy when making an insurance claim. In other words to reduce the price, policy holders are proactively sacrificing levels of cover and exposing themselves to high levels of potential upfront costs and risk, by opting for less comprehensive policy options.
The ease and convenience of online home insurance websites provide are forcing many traditional high street small brokers out of business. At the same time the insurance industry is seeing a record number of fraudulent insurance claims, as the recession claims jobs and puts many people under pressure. The ABI’s latest data confirms that every day of the year insurance companies expose 335 fraudulent insurance claims which is costing the industry £2.3 million a day. The vast majority of these are homeowners who have deliberately caused accidental damage to their own home in order to put forward a claim (such as spilt wine on an old carpet). The most expensive type of fraudulent claims are motor insurance involving accidental damage to vehicles.