Home Insurance, a buyers A-Z guide

A is for Attitude; If you don’t claim, bear in mind that is probably a GOOD thing!

It means nothing bad has happened to you. Maintain a positive attitude that had something bad happened, you get the right insurance from the right brand to cover you.

B is for Brand; whoever you insure with, make sure you check out what they stand for, are they talking straight to you or wowing you with things that sound great?

Buying the policy is just the start, you have to work with your insurer if you ever need help, can your brand do more than just fancy marketing?

C is for Cover; as we repeatedly say; read your wording and make sure that you are covered properly. The cover you want depends on how much peace of mind you want.

Cover obviously costs you money, so it’s a balance between the two.  If you claim, you don’t want to get a shock and find out you aren’t covered.

D is for Date your house was built!

We wrote a nifty blog post on this, it’s a tricky one! All insurers need it though to give you a proper premium. The only problem is; if you don’t know it, it’s a complete pain to find out!

E is for Excess

Not a weekend thing. No, this is the bit that you need to initially pay yourself in the event of a claim. The lower it is, the more expensive your premium gets. Always check the excess as this is the additional cost of claiming.

Most insurance has a standard excess, you can make it a cheaper by adding a voluntary excess on top.

F is for Finance; if you opt to pay your premium monthly, most insurers use a financing company. Be aware this does add a little to your premium.

We accept up front payments, so it’s your decision how your fund your insurance.

G is for ‘Go and compare’; we love being compared, that’s why we have a price match facility on our quote engine! So get some other prices and if we can match it, we will.

You should always get some alternatives, we’re confident we can match or beat rivals (subject to conditions of course!).

H is for Help; if you ever need it, always ask for it.  We are here Monday to Friday on 0845 355 1150 for a lovely insurance chat.

Break the dinner table taboo and talk to your friends to gauge their preferences, they all buy insurance and probably won’t mind sharing their thoughts either.

I is for Investment; Home insurance is an investment. When you cover your home, don’t view it as something of a “cost”. It’s there as a safeguard.

J is for Jargon: Break jargon game, by learning it. Come on, lets not give insurance too much of a hard time, it’s a natural thing to have special phraseology, isn’t it?

Everything from Marketing to Banking has jargon too: just think about AER (messy!?)

K is for Keep!  Keep your receipts organised, when you buy something, you get proof of purchase for a reason, it is a foolproof way of showing an insurer that you own something and that it was worth a given amount.

It’s a great way to help calculate the value of your contents as well!

L is for Lloyd's of London; you may have heard of Lloyd's, but what does it do? Well, in short, it’s an insurance market.

It sells insurance or reinsurance to both direct clients and other insurance firms that want to specialise in certain products.

Lloyd's of London has a huge hand in your home insurance and other personal insurances.

M is for Material Fact; tell the truth, the tangled webs some weave only serve to muddle all our insurance cover. If you hide something, you will get found out and perhaps even blacklisted.

Insurers view this very strongly as it messes things up for everyone…

N is for No Claims discount

Enough said. This is a yearly discount to reduce your premium when you don’t claim. Insurers acknowledge its not fair to ask you to pay the same year on year.

O is for Organised; it wont take a lot to get organised, remember ‘K’.

 Get your documents and contents list organised and in one place ready and waiting when its needed. Refer to the list and your cover documents once every few weeks to keep it up to date. No one can remember wordings to the letter, can they?

P is for Premium; this is the price of our products. It’s set to reflect the risk of you claiming and it includes commission for the place you brought the product from

Insurance retailers are the same as any other. It’s like when you buy a mars bar or can of Coke; you don’t buy them directly from the manufacturer do you?

Q is for Quote Engine; a quote is a non binding indication of a price, they can change. This is because we only ask a couple of quick questions to generate a price you can evaluate quickly. 

It’s going to be very close (ballpark) to what you would pay, but might change if we need to adjust for some more detail you tell us later.

Quotes expire, so if you have received one and like it, do not delay too long to buy it!

R is for Renewal; some cheeky insurance retailers price low to begin with and then increase your premium on renewal.

Check your renewal details and cover, or join a brand that guarantees no unfair price rises on renewal (like us, plug). Renewing with the same insurer, can help you.

S is for Service; now is a recession and you need to get quality service for wisely continuing with your insurance investment.

Our customer service team is one of the best in the business; we’re sure you’ll be impressed and have a nice chat with someone in a UK call centre.

T is for Terms & Conditions; there are certain things that are excluded as standard or stipulated by the insurer. Make sure you are aware of them before you buy.

Have a read through the wording, head straight for the exclusions and the cover levels to ensure you are satisfied.

U is for Underwriter; there is a real person that lives and breathes and wants to help you get good home insurance. 

They create the prices or terms in a way that is fair for all policy holders and reflects the risk each brings to their pool of clients. So its not all online quote robots…

V is for Value; you pay for what you get. Sometimes, the cheapest is not always the best value. Service, price and financial strength all apply here. Demanding value is the A-game. 

W is Warranty; this is an agreement that certain fulfilment's have or will be made to validate an insurance product. 

A basic example would be the fitting of a deadlock on your front door. If you don’t uphold warranties, it can not just jeopardise a claim, but invalidate your home insurance policy.

X is for 'What Rating?'; no, nothing naughty, but it fits. Every insurer has a financial security rating; this is a measure of how strong their balance sheet is (Our Home insurance is A rated).

The earlier the letter in the alphabet, the more likely they won’t go bust and can afford even the meatiest claim! The better the rating, the more valuable their “word” is to insure you. Do you want top, middle or bottom of the class?

That’s why some insurers are more expensive, they have stronger reputations and the laws of economics kick in. You are looking for a strong provider at the right price for you.

Z is for Zeitgeist; boo to the fad. Sometimes it seems we see the same trend of marketing ideas, such as free contents or introductory deals. It may seem like a real bargain, some can be woolly...

Beware the latest zeitgeist, as nothing is really free. Make sure you really are getting a good deal and not a good advertiser.  

Renewing your Home insurance, thoughts..

All good things..

All good things come to those who wait? Well, regardless of which proverbs you live your life by, it is arguable that this statement no longer applies to the insurance sector as the trend for moving on continues.

It seems that the pressure is on more than ever to continually move providers seeking to drive down the price of personal insurance products. Advertising for comparison platforms is more driven than ever before. There are doubtless, thousands or hundreds of thousands of policy holders that renew with the same provider, the reality still remains that the market is very formidable in its approach to tempting clients to switch.

With many of the other products we buy in life, we find a “routine” and we stick to it, each of us has a shortlist of favourite haunts for our clothes, food and gadgets. Does the same apply to financial products? If not, why not?

The difference is clear, each of the other products are purely for consumption purposes, providing us with a unit of the mystical measure of economic satisfaction the boffins call “utility”. In layman terms, this means that they are things we enjoy buying.

Insurance products are designed to indemnify the buyer, in the event that a given event or occurrence takes place. The dreaded claim! Contrary to popular belief, insurers don’t really mind claims at all, in fact, without them, they wouldn’t have a job! It is the job of an insurance company to ensure their premiums represent the likelihood any given punter will claim plus the costs and margins they need to survive.

Sticking around:

As a consumer, you may not derive much pleasure from buying insurance (in fact one might be shocked if you did!), but sticking around when it comes to renewal has real benefits.

Firstly, insurance relies on participation to ensure the products and prices are adequate. If you stick with your insurer you can help shape the service you want. That is certainly the approach we are taking. The longer a client remains with us, the more satisfied we want them to be.

Secondly, isn’t it better to build a relationship of trust? Home insurance may seem trivial when you aren’t claiming, but what happens when the chips are down? We worked hard to get to know our customers in their first year- if we have done our job, they should like us. Get to know your insurer, ask questions of them, our UK call centre is manned by very friendly normal people (not robots or automatons!).

If you are a valued customer then within reason, your preferred insurance brand should be willing to keep you with them. We freeze our premiums for renewal; this is a gesture to show that by joining us, we want you to stay with us. We won’t risk losing you by hiking up the prices, without you having claimed.

Lastly, I shall use an analogy which I think is quite poignant. If you have ever moved jobs, you’ll no doubt have a lovely CV. Any prospective employer is in a position to judge your loyalty and worthiness of a job by your previous record. If you haven’t stayed in a job longer than six months or a year, they may regard you as a weaker applicant and you’ll not be front of line to work with them.

There is a danger of this happening in insurance. After all, an insurer only has a finite amount of capital to risk by insuring consumers, if they change their client acquisition strategies in the future, higher prices might be charged to those that they worry will just take their security and move.

 

Keep one eye on the future!

At present, prices in the insurance sector are still competitive and falling. This is of course brilliant for the consumer. Home insurance shoppers should be aware however, that insurance is a long term strategy.

Perhaps consider how you view the purchase of the product (your utility), if you don’t claim, do you worry that you wasted your money? Well, to be honest, you shouldn’t. We buy insurance “just in case”, so really the fact you haven’t claimed is a good thing for you. You didn’t have to go through any hurt (the cause of the claim) and you can focus on getting on with life. Insurance should really be owned and only heard in response when “help” is cried.

Think about what makes you loyal to the other brands you buy from, look for the qualities you demand in your insurance brand. Do they exhibit behaviour that reflects your values? Do they want to get to know you, or just get you on the books? It’s a serious product, so perhaps its worth joining a brand that keeps their service serious?

If you stick with the same insurer for a long time, then claim, they might be able to view your account from a different perspective. Your loyalty could help you save money, where otherwise a premium rise would be high; your insurer might be more helpful because they are confident you will stay with them.

The better your insurer and account manager knows you, the better job they can do and the smoother the renewal process goes. At insurance4everyone, we have specific products we have put online, but our team can source products from a number of providers. Think of us as a confectionery store that stocks more than just one brand of chocolate bar.

Choice is great and with that choice, you can position yourself near the price you want to pay.

You pay for what you get!

As with everything in life, you pay for what you get. With insurance, your price is sensitive to two distinct factors. The security of the insurer and the conditions they place on the promise to help you when things go wrong.

If you buy a really cheap product it might be that your insurer is actually a bit weaker financially than its competitors, the risk of them going bankrupt or not being able to afford a deluge of claims is greater. By taking that price, you agree you are willing to accept that risk.

A lesser price might also mean, less is covered, I think this is the second post in as many days where I have said that all insurance products should be read thoroughly. Seriously though, I can’t say it enough.

So next time you look to change insurers, pick one that you can see yourself sticking with and run a quick test- “if I don’t claim, would I still value the service these guys provided?”.

As always, our lines our open to chat and help you on your insurance products, we cant wait to hear from you.

 

James*

Marketing& Branding

Scrap the FSA? Lets talk about it..

Today sees fairly substantial reports that any future Conservative administration would abolish the Financial Services Authority as it stands in its current form. Is this a good thing or a bad thing for consumers and what impact will it have on your home insurance providers?

We’ll explore a few areas here on the blog prior to the release of all the devilish details tomorrow. Shadow Chancellor, George Osborne, is said to be mulling over carving up what he described as a “failed” architecture for financial services regulation in the UK.

Out of the frying pan?

Clearly, this dramatic news is the product of the fabled “Credit Crunch” of 2008, where the banks got it a little bit wrong with their product creation and risk management.  Does the UK insurance industry really need another change though? The FSA in its current leviathan form was only truly incepted in 2001, it may be a little too soon to go about changing it all again. The sheer scale of the FSA’s impact on insurance culture should not be underestimated.

From an insurance retailer perspective it is not due to any adverse increases in insurance premiums or poor industry claims records that this change approaches. Our sector has been strongly regulated for sometime and despite ups and downs, improvements for consumers are being made.  The sector is focused upon consumer demands and needs and everything we do here at insurance4everyone has one eye on the impact of compliance with regulation.

What we really need to know from the Tories, is how exactly the insurance regulation element would work. A lot is written about the Bank of England gaining some powers, but I'm sure that Mr King and his associates probably do not wish to be regulating insurance as well. 

Clearly there would be few in the industry itself that would affirm their belief in a softer hand with a drizzle of common sense for UK insurance regulation. FSA rules and policy stances can be somewhat labourious to decode and are often based on a reactive stances, rather than definitive “yes or no” answers. 

 

Consumer benefits galore or costs pressures…

At insurance4everyone, we are in full support of a system that helps consumers understand products, get a fair deal and promotes the value of the products available. Any changes that future governments make to the current regime should have the correct balance between moral and measurable consumer benefit.

There will be members of the industry that have experienced increases in costs due to FSA prescribed rules and interventions but caution must be in our minds. Being a member of the FSA costs any insurance entity money and obeying the rules and keeping a watchful eye on maintaining these standards requires resources.

Thus any change in the regulator has the potential to put more cost pressures on your insurance retailers if the regulatory burden increases. There are so many mediums for us to meet consumers, that the amendment of assets could be highly prohibitive in terms of cost. We are taking about copy changes to websites, stationary and advertising. For all of us. 

The worst case scenario is that these costs get universally moved onto the insurance retailers pricing and underwriting policies.

In addition, there might be a concern that a “new” entity employs a more headline strategy to find its footing, making sweeping changes or changes that mark a stamping of its new found authority. We do not need change for the sake of change. A higher compliance burden would affect consumers in a more direct manner, the most poignant of these issues being the use of aggregator sites and the regulatory requirements they face in the future.

Were the consumer watchdog to crack down on unrealistic and unsustainable client acquisition practices that some of the major brands are currently running, it might be a good thing for punters in the long term. 

Consumer understanding still needs promotion:

We regard consumer knowledge as one of the most critical areas of modern insurance retailing. With the marginalisation of the insurance broker tradition for small business, consumers have to think and compare with far more self reliance.

In terms of the FSA’s remit towards insurance, were the Tories to win the next general election and reform it as publicised, the focus would need to be on ensuring that our consumers are being supported by a body that continues to advise and educate them on the complexity of the products they buy. We are obliged to follow directives laid out by our membership to the EU, so how much latitude is there for change anyway?

It is also arguable that few consumers than one might hope really understood the retail insurance role and responsibilities of the FSA? If you were a regular visitor to http://www.moneymadeclear.fsa.gov.uk/ then you are a tick in the FSA’s review reports, I fear however that you would be in the minority.

A new FSA- let’s talk about it first..

Let’s ensure that a new regulator is what’s best for all financial services industries and the respective consumers and businesses in each sector. The regulator has a huge mandate and stripping these pieces out threatens to create competing and conflicting government departments. 

If the Bank of England regulates insurance pricing and a consumer watching regulates the sale- what happens if they both disagree perpetually? Chaos and confusion, that's what would happen. In a sector where consumers are already less confident in their understanding of the important products available to manage the risks of life, many instead relyon personal experience and their peers. 

The last thing that consumers need is retailers facing ever changing compliance costs and yet more diluted and confusing protocols and rights. What consumers need is stability in product delivery and pricing from an industry that continues to put their needs first. We will continue to focus on our customer service, because its something that sets us apart. 

Whether or not the regulator does change in a couple of years, our advice would be as always, read your wordings and policy documents and if you don’t understand areas of it- feel free to call us and we will talk you through the nitty gritty!

Chat to your friends and colleagues about their insurance purchasing habits, it is a product that we all buy (i even have home insurance don't you know!), so get the conversation going. 

As a consumer, it might be worth thinking about what kind of regulation you want for you financial services, does one size fit all?

 

James*

Marketing & Branding Team