I’ve previously explained why policy prices might go up. So shop around. I’ve also explained some of the major pitfalls of getting your insurance wrong, with Rejected Claims. So let’s go through the process of getting a quote. It’s simple right? Log on to a comparison website, enter your details, pluck some numbers from thin air for your cover levels, and voila. Maybe you then choose the very cheapest price available. Plenty do. These are often the same people who’ll write angry reviews on websites when they are ‘screwed over’. More on that later.
Others will pick a nice looking policy that’s cheap but not the cheapest. Preferably with a company they know of. They think of themselves as savvy buyers, who know what they’re doing. Yet a good deal of them are still buying policies based on numbers they plucked from thin air. Others will make sure they buy a like for like policy, entering into the comparison website what is on their current policy. They’ll think of themselves as careful buyers. And yet they are still buying policies based on figures that were plucked from thin air last year, or the year before that or the year….etc. Or figures that are hopelessly out of date.
How about this for an idea. First of all, imagine how your life would be if you lost everything. Every last brick, every last cupboard door, every last shirt on or off of your back. You’ve got nothing. At all. Tonight, you’re sleeping on the street. Seriously, really picture it. Pretend it’s happened. Got this image in your head? Great! We’ve established that your home and possessions are reasonably important. Dedicate the time and care to their protection that your entire future warrants. It’s not something that you should approach with the idea of getting over with as quickly as possible, as cheaply as possible. Does this sound obvious? Judging by the calls I receive, this is brand new information for a majority of home owners.
Part one – get your current documents, or your renewal pack. What are you covered for? Make a check list of key facts. I’ll provide one in a later post. You can write down everything your current policy offers. Does it fully cover all your needs? Most people have this comfortable feeling with their current policy. It’s been ok this last year, so the same again will do. But will it?
Part two – evaluate your needs. Remember, there’s no real problem being over insured. If you’ve got far more cover than you need, that’s fine. There can be serious problems if you under insure yourself however. So don’t simply look up what you’ve had covered and how much for. Work out what you need to have covered and how much for. Go room to room and add every little thing up. Remember to work out it’s current retail price. And the fitting costs if necessary.
Not sure how much something is worth? Look it up. The internet is your friend. If you are going to pluck numbers from thin air, at least give yourself a little bit of protection by grossly over estimating. Is that sofa worth £600 or £700? Let’s say £1,000 to be on the safe side. There’s no problem with being over insured! Are there any special things you want to make sure you have covered? List them separately.
Ok, so you’ve got an idea what your contents need. How about the building itself? Most insurers these days offer blanket cover with £500,000, £1 million or Unlimited policies. Great. But why not check up the estimated rebuild cost of your house anyway, using the Association of British Insurers calculator? Just to make sure.
Consider your excesses. Most policies, if not all policies, come with a standard (or compulsory) excess. You can add voluntary excesses, which may reduce the premium you pay. May. It very well may not, or the difference may be negligible. Check with the insurer! Ask how much difference it makes. Get a price with and without the voluntary. An awful lot of people wallop on large voluntary excesses automatically, and sometimes for little to no benefit.
Also consider whether or not you could actually afford the excess if you needed to claim. A reduced premium might sound a great idea today to save you £20, £40 or £60. It’ll not seem such a great idea if you claim for something worth £800 and discover you’ve got to pay the first £500.
Don’t Show Your Whole Hand
If you are speaking to an insurer, be it face to face or over the phone, then they will also fact find. They want to know what sort of cover you have currently, so they can match it as far as they can. That’s fine, tell them. They’ll want to know what your excesses are. That’s fine, tell them. Why not? Do you want a comparative quote or are you looking for random prices. You’ve done your fact finding. Share it with them. Get a like for like quote to establish how they price for comparative cover. You can always ask how much extra cover will cost later.
I regularly get customers call for a quote who stubbornly refuse to disclose anything about their current policy. They won’t get their documents. They don’t know what cover they have. They just know the price. We go through a pointless quote and I give a pointless price which is either more or less than their current deal. The customer will then either buy it or reject it purely on price without a second thought for the cover. Would you ring up car showrooms and just ask, how much for a car? You’d be asked what sort of car? Saloon, hatchback or estate? One litre engine or a juicy V8? Convertible two door or a five door? Would you respond, ‘just want a price for a car mate’. Hopefully this isn’t how anyone would buy a car.
They’ll then want to know how much your current insurer is going to charge you and/or what is the best price you’ve had from any other insurers. For the love of God, keep that to yourself! As much as I’m surprised how many people refuse to disclose their cover, I’m equally surprised how eager some customer are to reveal everything. How can it hurt to tell the agent how much you’re paying? Ok, so you disclose that your renewal is £500. He goes through the quote and finds a price of £200. That’s what he finds, but that’s not what he’ll necessarily quote. He’ll add cover and uplift the premium and quote you £400. You’re delighted at the saving! You’ve also just been royally ripped off.
You’ve got a good choice of comparison websites to hit. GoCompare, MoneySupermarket and Compare The Market are the big three. You type in your details and press the button and hey presto, there’s a big selection of policies ready for you to choose from. What could go wrong? Possibly nothing. But here’s the deal, just to give this some context. I started my job about three years ago. I spent a month in training, after which I had about 5% of the knowledge that I have today. And 0% the experience. For that first month after exiting training and getting on the phone I made an absolute ton of mistakes. I didn’t know I’d made those mistakes. Nor did the customer. They are not always obvious. And had my poor customers needed to claim? Ouch. Fortunately, we have a quality control department to pick up on those errors and put them right.
So. You’re on the comparison website. You’ve got my job. There’s just one difference – you’re without the month’s worth of training. And none of the experience. Good luck! On the plus side, you’re doing my job with only your interests at heart. No conflict of interests. And to be fair, you can probably get it right. Probably. Maybe. Lots of people do. But again, it comes down to risk. The onus of getting the policy right is 100% on you. Not on the insurer or broker. You’ve entered the details. You’re responsible. Did you miss something? Your tough luck. An awful lot of people get it right. A rather sorry number don’t. And this is something that you need to get 100% right – 99% isn’t good enough.
There’s potentially another catch. The comparison websites and the insurers websites don’t always play kindly together. You don’t always get what you ask for. Because the comparison websites have a template designed to fit everyone, they rarely fit anyone perfectly. They can make quite a few assumptions that you must check with the insurer, because the valid quote can quickly turn into an invalid policy. Trees, watercourses and flooding are common ones. So should you steer clear of comparison websites? Not at all. I would simply recommend that you use them to give you an idea of what might be available. Whittle down the list of candidates. Then call the insurer directly to discuss the quote. And by doing so, share the responsibility for getting it right!
Honestly, give them a miss. My employer would hate to hear me say it, which is one reason why I don’t reveal who my employer is. But give cold calling home insurance sales people the elbow. There are two simple reasons for this suggestion. Employee turnover in the Outbound dialling industry is quite high. High enough that there’s every chance that the person who calls you hasn’t really been doing the job very long. Not an expert. Although he might sound like one.
Which brings me on to reason two. They are pushy. They have to be. It’s their job to sell to you, not offer you a quote. Not many quotes turn into sales later on. So the pressure is on them. And they will turn the screw on you. They’ll say what you want to hear. If you put my two reasons together, and can add 2 + 2, you’ll appreciate that mis-selling is not exactly unheard of!
That’s not to say all policies sold from a cold call or dodgy or that you can’t get a good deal. It’s just about risk. There’s just more chance, in my opinion, of a cold call purchased policy not being quite the policy you should have bought.
It couldn’t be simpler. Call an insurer and get them to talk you through it. Hey, you never know, maybe you’ll talk to me. This is what I do. On the other hand, you might not get to speak to me. That’s a shame. But console yourself with the fact that call centre staff who deal with inbound calls tend to stay in their jobs a lot longer than cold calling agents. They tend to come across a greater diversity of issues. So they tend to have greater experience and product knowledge. Sure, you can get some good agents and some not so good agents. Bad agents? The industry is tightly regulated. A bad agent won’t last long at a reputable firm.
This is how I would buy a policy. Correction, this is exactly how I recently bought my insurance policy. I knew what cover I wanted. I knew what is important to me. I’d done my online research and gotten a quote on both a comparison website and their own website. Then I called them and got the guy to talk me through it. He has a duty to tell me about any catches or ‘hidden’ details. If he made a mistake, or mislead me, then I am still covered. Albeit by the broker and not the insurer.
For the record, I took out a policy with John Lewis, underwritten by RSA. They were very good. Good cover, good price, good service, decent documents. I don’t work for John Lewis. The company I work for wasn’t competitive for me. I’m not really their target market.
The brokers and the banks. You can find both on the High Street. A lot of people feel more comfortable talking to someone face to face. That’s fair enough. This isn’t my greatest area of expertise. I’m very much a phone jockey. I’ll make two observations from what encounters I have had. The high street brokers don’t seem to offer the best value for money. But then if the extra cash you’re paying buys you greater peace of mind, then it may well be money worth spent.
The banks. I have nothing nice to say about banks whatsoever. Their policies tend to range from so-so to plain old fashioned low grade. The bank staff are ever so friendly, I’m sure. They’re also Jacks-Of-All-Trades, and clearly not specialists. I’ve had to speak to many of them on the phone, when they call up with a customer to try and get them to switch.
There have been some classic moments. One of them pretended to be the customers grand daughter. Not only unprofessional, but completely illegal. Another starting contemptuously telling me that my company ‘only provide £1,000 worth of cover for water leaks’. Never mind the fact that she was trying to sell a policy that would blatantly under insure the customer. If she lost a £1000 of water, the utilities bill would be the least of her problems. I’ve had agents in banks blatantly lie. That happens with shocking frequency.
They will also set up policies for their customers and tell them that ‘they will cancel their old policy for them’. That’s another lie. They cannot cancel a policy on behalf of the customer. They just cancel the Direct Debit. Then let the customer deal with the problem later. It’s sleazy. My suggestion would be to avoid banks when it comes to insurance. Like the plague.
When customers phone up and ask for a quote because they feel their current insurer is charging a bit much, I’ll ask how much. They’ll sometimes tell me a figure which is quite astronomical. Ridiculously expensive. I’ve seen policies which should be £200 to £300, and the customer has been paying £500, £600, £800. I know two things straight away. They’ve been with this insurer a long time. And that the insurer is a bank. Throughout this article I have generalised a lot. This last point is not a generalisation. I have never come across a ridiculously over priced (at least treble our price) premium that wasn’t from a bank. Ever. Ever ever.
I will also name and shame the worst of the banks from my experience. Santander. Of course, my experience is limited. Although, as we’re moving on to the review sites, I might mention that they’ve been hovering between rock bottom and fourth from bottom over at Which? for quite a while now. So my experience doesn’t appear to be far off the mark.
So how good is your insurer, or a potential insurer? You can always Google the customer name and get real life testimonials from actual customers! But. Don’t bother. It’s a pointless exercise. Did you read my article on Rejected Claims? You’ll be reading their testimonials. They are, sadly, confessions of ignorance. Not reviews. People with happy experiences rarely post reviews.
Two of the most popular and relevant review sites are Which? and Defaqto. Although, to be honest, the Defaqto star ratings are a little bit meaningless in my opinion. Everyone and their uncle gets five stars. Those stars don’t show the whole picture and focus exclusively on the cover. But still, it is at least one further measure you can use to help choose your insurer.
So there we are. The quote process. I trust you didn’t buy a policy straight at the end of any of those quotes, did you?! Get them to post their quotes out. If an insurer tells you that they don’t post quotes, the agent is probably trying to coerce you into buying a policy. You never ever need to give bank details or card numbers for a quote. If an agent tells you that you do, he’s lying and is trying to set up the policy.
It’s a common trick, and they offer explanations including ‘it’s to save that price’ or ‘it’s so we can get the full set of documents out to you’. It’s a ruse. Although you will get the full set of policy documents through rather than just the quote, but that’s because you just bought a policy. In either case I would ask to speak to a manager (if he or she refuses, take a note of their name, hang up and then phone the company back) and explain to them why you won’t be buying a policy from them.
So you have your quotes. You now know what options you have as far as cover and price are concerned. You also know how quick these guys answer the phone. You can see what their documents are like – some are definitely better than others. I’ve come across some document packs which are just Double Dutch. I have a vague idea what I’m doing and what to look for, so if I’m confused….well! Tut tut. You can read through all the quotes at your leisure. You can now make an informed choice, based on multiple factors. Not just the price. And you can examine the cover. Which is what I will be examining in my next article.