Is Your Home Insurance Renewal Quote Really Competitive?
How do customers know a price quoted for a property insurance policy is competitive or not? Price comparison sites are useful at comparing policies on a like for like basis... but what happens if an insurer has two separate prices; one for existing clients wishing to renew their existing policy and one price to attract new business customers? Assetsure was recently contacted by one of our website visitors, who had found that the price of the renewal of his existing homeowner insurance policy was significantly more expensive than if he had instead used the internet to buy the same policy but as a 'new business' customer (while cancelling his existing policy). In effect, he discovered his home insurance renewal was eighty pounds more expensive than the same policy but taken out online by a new customer.
Confused and annoyed he rang the insurance company who admitted if he cancelled his existing policy and went online he would receive the cheaper'new customer' price. When he enquired why he did not just receive this price in his renewal notice, the call centre operator at the insurance company simply admitted 'that is the process' I just couldn't believe they were so cheeky to charge a higher rate on my renewal notice and think that I'll just pay it. My wife did a bit of shopping around on the Internet and discovered my existing insurance company had the best price for new business customers only. In the end she discovered the new business price could be obtained if she cancelled the existing policy."
Low margin or loss leading home insurance products are offered to attract new clients and gain market share. These new clients can then be offered other products with high margins. Attractive short term price deals to increase market share appears to be an increasing tactic used by the larger insurers at the moment. The constant bombardment of television advertising by online comparison brokers, aggregators and direct insurers is making UK insurance very competitive. Once a new business client has been obtained special offers and discounts for other insurance lines can be offered.
It appears that some companies rely on the apathy of the consumer who simply can't be bothered with the hassle and time of shopping around once the renewal notice arrives on the doorstep. Some consumers simply believe they are already receiving a reasonable and fair price from their existing insurance company, perhaps because when they first to gather policy up the price was competitive relative to the rest of the market - perhaps because the constant television marketing is so persuasive and frequent. It is of course true that other forces push up prices across the industry. An obvious example of this is the recent flooding which is prompted some larger insurers to raise rates for all customers (whether new or existing).
To those of you who are always seeking a better deal always:-
- Visit the insurers website and put through a test quote as a new business customer
- Check the small print on on special offers and seemingly very cheap deals.
- Check the level of cover is appropriate for your needs. You may or may nor need contents cover away from home and accidental damage at a high level.
- Check the excess is on specific areas are not too excessive
- Improve your home security such as approved locks for windows and doors, alarm systems and neighbourhood watch.
- Check savings or buying annually versus monthly