Insurance Insider: The Call Centre

In February 2011 I found myself back in the UK in need of a job. I had high hopes of a career as some sort of an online community manager. I had realistic expectations of resuming my career in retail management. Neither option was particularly fruitful in the first couple of months of job hunting. I generally despise agencies, but needs must, and along I went to a couple of Bournemouth recruitment specialists. Bournemouth employment is dominated by two industries. Tourism and finance/insurance. But surely there’d be something else that suited my skills better than those two.

The first agent had a job in a call centre selling home insurance. I had my own preconceptions of life in a call centre. Not good ones. We’ve all had those evening calls from persistent salespeople. Nothing else, I asked? Nope. Bin man? Mortuary assistant? Nada. Bag packer at a supermarket? Zilch. No big pharmas looking to pay for human guinea pigs to test risky new drugs on?? They didn’t have a thing. Just call centre jobs. I think they detected my reluctance to embark on a new career in extreme telephonic boredom. I wasn’t to hear from them for six months*.

But before I left the office, I heard someone in the next room mention the name of the insurance company. I went home, looked them up on the internet and applied directly for an Outbound dialling vacancy. I got a call back and an interview was arranged a couple of days later. I still wasn’t keen. But I did need a job. So I put on my best garb – my wedding suit – and lumbered into their office block, feigning as much enthusiasm as possible. I was given a cup of coffee. It was a vile concoction. I drank it all, just so as not to offend. Make a good impression etc. I needed a job that much.

The interview consisted of a few questions to see how motivated I was. Oh really, really motivated. Honest. I did a quick spelling and math test. How do you spell ‘kill me now’? Then I had a chat with a lady who ran one of the Outbound dialling teams. She was really quite pleasant and we had a nice talk. She asked about Mexico. She asked about my wife. Well, she’s still in Mexico at the moment. She asked when she was coming over to join me. Well, visas are expensive – I need to get a job first! I saw the empathy and even pity written all across her face. Bingo! The job was mine. And why not? You think I cheated with that bit of emotional blackmail? Absolutely not. That was my first sale for the company. It’s all about rapport. You’ll see…

I left the interview with a start date. The nice lady had gotten me a job with the Inbound department, which is not only a better job, but the start date was a month earlier. The difference between Outbound and Inbound roles is as their titles suggest. The former is the guy you hate. The guy who calls right in the middle of dinner to offer a quote. It’s extraordinarily repetitive, combative and competitive. The latter is the guy you call to accept or get a quote, to amend or renew your policy or to let off steam when something doesn’t go your way. It’s more varied and less pressured.

So on April 4th 2011 I went along for the first day of four weeks training. For the first two weeks we learned about the home insurance product we sold. We learned about the computer and dialling systems that we used. We were introduced to the script. A lot of what we say is scripted, to ensure we are compliant. That’s to say, to ensure we sell in accordance to the defined regulations for our industry. Which has, if we’re going to be honest, a pretty shabby reputation.

We were taught sales techniques. Fact Find – what does the customer have, what does he want, what does he need? Match and Demonstrate – make sure we offer a product at least as good as he has, and demonstrate the benefits of being with us. Objection Handling – how to overcome (or overwhelm!) a customer who keeps fobbing us off. And, of course, Rapport!

People buy from people they like and trust. Build up a relationship. If the customer mentions something you are familiar with, the start up a conversation. Or else talk about the weather! It works. During the first couple of months, I received a call from a chap who had just moved back to the UK with his family from Mexico City. He’d been working for a large international company. Yes, we talked about Mexico. Yes, of course he bought a policy from me!

Week three was training on the phones, calling real customers. Although I was going onto an Inbound team, everyone who joins the company has to prove they can sell on the phone. I had to sell one policy in a week. In the event, I sold three in my week. Others just couldn’t do it and disappeared, either through their own choice or on a less voluntary basis. People come and go in this industry as in any other industry. Just a lot quicker. An Outbound agent who has served a year in the same company is something of a veteran. Two years is a rarity. Anyone who lasts three years deserves a medal. The Inbound department is quite different. On my team of eleven agents, I am the longest serving employee. But there’s a whole bunch who’ve passed the two year mark. Even the newbies have been here a year or more.

My working day is simple. I turn up, turn on the computer, log into the dialling system and wait for the calls to come in. Some days are non stop. Others can be rather slow. Some days I’ll get a steady flow of customers renewing their policy. Other days I’ll have a stream of customers calling about quotes they got on Compare the Market, Go Compare of the MoneySupermarket. My job is to sell as many policies for as much money as possible in the quickest possible time whilst remaining compliant. And also remaining civil – there are plenty of customers who will put your patience, even your sanity, to the test. But at least I don’t work for the guy in the video above.

Some agents are really money focussed. Most, almost all, call centres have bonus schemes. A lot of those schemes are based on commission per hour figures. I despise this, as it encourages poor behaviours and penalises good customer service. The most successful agents bonus wise will get rid of you as quick as they can. That may even mean ‘accidentally’ hanging up on you if you are taking up their time but are unlikely to earn them any commission. I’ve seen these sort of agents rack up bonuses of £1,000 to £2,000 per month.

Fortunately, my company has backed away from this system and is now rewarding staff for service and hard work with a simple share of the commission they earn. This means the bonus pool is more fairly shared around. I can earn three, four maybe soon five hundred pounds in a month in bonus. But I can still be conscientious and offer decent service. Which makes me happy.

There are good days and bad days.I’ll work harder for a nice, pleasant customer. I’ll still work hard for an average customer. I’ll do the bare minimum for a rude SOB. Only a couple of times have I had to end a call and hang up on a customer for being abusive though. It’s like anything else in life. Treat people like you’d want to be treated yourself. My hours of work are reasonable. Some Saturday mornings, no Sundays. Certainly a lot less anti-social that in convenience retailing. I get all the bank holidays off. And I get to sit in a reasonably comfortable chair in a nice modern office in the warm and dry. The people I work with a a nice bunch, which counts for a lot. Although every now and again we get a new person who is quite, quite mad. They don’t last long.

So, in short, I’ve had many worse jobs. There are frustrations. The company I work for gets things wrong sometimes. Occasionally they screw up spectacularly. There are some reservations I hold about the way they do business and the way they handle employees. But life is never perfect. If they stoop below a level that is acceptable to me, there are plenty more call centres in the area. And vice versa – if I don’t perform, there are other agents waiting for my job.

But what, you might ask, has any of this got to do with you buying insurance, other than giving you a brief run down of my career history within the industry? How will this help you in anyway in getting the right cover at the right price? Well, there’s a point to this that is so obvious that a majority of callers seem to miss it entirely. When you speak to a call centre, you are dealing with a human being. He or she will have their own story. Some will be better than others. They are unlikely to want to bleed for their company. What you get out of them will largely depend on you. Be nice!

  • I received an email from them six months later, telling me that I hadn’t got the job. Of course I replied. Just to inform them I had got the job, was still going strong, and how much commission had they lost for not sending me along for an interview? I got another email from them about a year ago, asking if I was interested in a job at the company I work for. I despise recruitment agencies like you despise call centres…

Insurance Insider: Get Your Quote

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.

Fact Find

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.

Comparison Websites

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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!

Cold Calls

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.

Phone Around

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.

High Street

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.

Review Sites

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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.

Your Quotes

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.

Insurance Insider: Rejected Claims

I work for an insurance intermediary – the full difference between an intermediary and a broker is pretty negligible – so I sell and manage home insurance policies. I don’t handle claims in any manner whatsoever. I do, however, get plenty of calls from (often irate) customers who wish to complain that their claim has been rejected. Whilst there’s little difference between an intermediary and a broker, there’s a world of difference between an intermediary/broker and an insurer. They expect us to deal with it. We don’t. We simply take a note of their complaint and pass it on to the insurer.

But these complaints do give me an insight into the world of home insurance claims, specifically the claims that are rejected. The general public at large  generally believe an insurer will do everything they can to weasel their way out of paying a claim. I’m sure that some claims are incorrectly rejected by insurers, but the vast majority of rejections are solely the responsibility of the customer. And when I say vast, I mean at least 99% of them. Probably.

Here’s a run down of the thirteen most common claim rejections I come across. There’s no science behind my list, just my experience at the end of a phone. I’ve listed them in order of what I believe to be the most common rejections, starting with the big ones first. The top three themselves I would estimate account for 80% to 90% of rejections all by themselves. Like I say though, and despite anything I may write below, the majority of these claims comes down to the customer not insuring themselves correctly.

They have unrealistic (sometimes laughable) expectations, they fail to enter information correctly, they don’t follow the instructions, they are too lazy to research the details of their own property, they lie, they fail to read the documents and more often than not they don’t have the slightest clue of what they are doing. But perhaps most of all, they pick the very cheapest policy and then later wonder why on earth it doesn’t cover all their needs.

It’s a bit like buying a one litre Fiat and being puzzled when it fails to keep up with a Ferrari when the traffic lights go green. Everyday I speak to customers who are taking policies elsewhere to save a few pounds who are guilty of one or more of those insurance sins. You’ve not entered the £6,000 claim on the new policy? You’re going for a £50k contents policy for a 5 bed home with £20,000 of that already spoken for with some paintings/jewellery? You haven’t told the new insurer you have an ongoing claim? I should mind my own business, you know what you’re doing? Absolutely sir, you’re the boss! They are disasters waiting to happen, but bet your bottom dollar when disaster strikes, they’ll be sure to tell everyone how the ‘insurer weaseled out of paying their claim!’

Additional Accidental Damage

Policies tend to come with three potential levels of accidental damage. None, Limited and Full. How to define these? None is the easy one. The middle ground is often referred to as Accidental Damage. I’ve often thought this is a little bit sneaky, because it does lead many people to think they are covered against accidents full stop. They’re usually not. They’re covered against accidents to a specific range of incidents, usually to fixed glass, sanitary fixtures and fittings, underground pipes and cables (Buildings) and to televisions, hifi equipment and computers (Contents).

Full Accidental Damage (aka Additional Accidental Damage/Extended Accidental Damage) is the full enchilada. Brokers often give a few typical examples – spillages on carpets and sofas and sitting on your glasses. There are tons of other potential incidents that can occur, of course. Stones falling out of rings, for example. It’s also the ‘catch all’ cover – if a claim doesn’t fit under the Main Perils of the policy (fire/theft/flood etc) then the success of the claim often depends on whether or not the customer has full accidental damage. Additional accidental damage can also include accidental loss, although you should double check with your insurer to see if this is the case.

I recently took out a Contents policy on my new flat. I opted for Additional Accidental Damage. If you shop around you’ll find a policy that will cover it without costing too much extra.

Personal Belongings Away from the home

A home insurance policy generally does what it says on the tin. It insures your home, and everything in it. While it is in it. Want your stuff insured when it is away from the home? Your phones, cameras, jewellery, laptops and other assorted stuff you wear or carry with you? Then you’ll need to add that extra cover on. This makes sense, doesn’t it? I’m not confusing anyone, I hope. Yet every week I’ll speak to someone who assumed that their contents are also automatically covered when they take them out of the home. Don’t assume. Check and verify. If you haven’t bought the cover, then it won’t be covered.

Wear and Tear

Home insurance is designed to protect the policy holder against unforeseen events, such as fire, flood, burst pipes, theft, malicious damage, impact, storms and more. It’s not a maintenance policy to help keep the property ship shape.  This, it seems, comes as a huge surprise to many policy holders. They’ll ask, with as much incredulity as they can muster, what on earth home insurance is for then? Well, it’s for unforeseen events, such as fire, flood etc etc. I can almost see my words going in one ear an fluttering out of the other, completely unimpeded by any solid matter in between. Often the claim is for slipped roofing tiles or leaking pipes. I’ll ask what caused the roof tiles to slip or the pipes to start leaking. Well, they’re old.  Yes, exactly. If you can’t identify which of the perils listed in our documents caused your problem, then it’s unlikely to cover you.

Unspecified Specified Items

Most policies will insist that certain valuable items worth a certain amount of money be specifically listed on the policy. What counts as a valuable and what the limit is depends on the insurer – there is no standard description or amount. You’ll usually find jewellery, watches and works of art on the list though. If you have an item that you be specified and you haven’t specified it, it probably isn’t covered. Don’t assume that it is only covered up to the insurers limit if you don’t add it to the policy. In other words, if the insurers limit is £2,000 and you have a £2,050 ring, it’s not insured for just £2k. It’s probably insured for precisely £0.

Non Disclosure

Another common-ish one. If you’ve made previous claims, then it may well make your premiums a little pricier. Unless, of course, you don’t tell the insurer about the claims. Which may work fine. Until you make a claim and the insurer checks the Claims and Underwriting Exchange. You’ll not just get you claim rejected, but your policy cancelled to boot. And cancelled insurance, which you’ll have to disclose to future insurers, may hurt your premiums even more than the claims. Other common causes for policies to be cancelled for non disclosure are criminal convictions and bankruptcies.

Add Ons

The UK has recently been battered by storms. Fences have come crashing down left right and centre. And thousand of home insurance policy holders are discovering that their policies do not cover fences. Very few policies cover fences as standard. You usually need Garden Cover, which you’ll pay an extra premium for.

Another common cause for complaint is that an insurer replaces part of a matching set with an odd item. It could be a sofa, or some tiles on a wall or the door of a kitchen unit. If you don’t have the optional Matching Sets cover, then you just have to take what you’re given. Incidentally, it can be tough to get matching sets cover on Contents policies. Very few insurers even offer it. It’s far more common to buy it on the Buildings policy.

Under-insured

I’m stunned by the number of people who, either through sheer ignorance or a wilful desire to avoid paying the right premium for their needs, under-insure themselves. In the worst case under-insuring yourself will lead to a claim rejection and even the policy being cancelled. But even if the insurer does pay out, many will penalise the policy holder by applying an average clause. Which will hurt your pocket.

Pre-existing claim

Another one that sounds obvious, but another one that quite a few home owners don’t quite get. An insurance policy only covers incidents that occur after the policy starts. Not before.

Timing and Evidence

Most policies will insist that a policy holder reports an incident within a certain period of time of the incident happening. Not 15 years later. Seriously. I’ve had that question put to me.  Some people are quite, quite mad. Insurers will also want to see evidence of the claim. If you need to claim for the contents of a freezer, it’s probably a good idea to keep the wrappers as proof. Just saying…

Excluded Cover

Price comparison sites will churn up some amazingly cheap policies. There’s a reason they’re cheap. You can find out what’s missing by reading the documents. Or, if that’s a bit too much effort, by finding out when you claim. If you choose to do it via the former, then keep an eye out for Endorsements, which can change the cover – usually to the policy holders disadvantage. If you choose to find out via the latter route – well, you got pretty much what you paid for. Very little.

Work is Done

I gently head-but my desk in an effort to relieve the stress and replace it with some patience and understanding when a customer starts telling me this story. The catastrophe happened. The customer got his favourite local workmen in to put it right. Then, to get his insurance payment, he sends off the invoices to the insurer to get them rubber stamped. The insurer has just the rubber stamp for them, and the word on that stamp begins with an R, ends in a D and has EJECTE in between the two. You must call the insurer when the event happens. They will send around an assessor and they will arrange for the repairs to be done by their contractors. Unless the insurer authorises you to do so, if you do it yourself, you pay it yourself.

Non payment

I’ve come across this just once, but I’m sure it must happen more often than I get to see. People cancel their direct debits, for whatever reason. Then disaster strikes. Twice. The incident. Then the claim rejection. Haven’t paid for the insurance. Then you are most definitely at risk of getting a claim rejected.

Uninsured

It happens. Not so often, but it does happen. Angry customer calls to complain his claim is rejected, because the claims agent has told them (he/she draws breath and exhales with as much contempt and scorn as possible) he’s not insured with them. I tappity tap in the provided policy number. And there it is. Lapsed. He/she forgot to renew the policy. That’s bad luck.

Insurance Insider: How Much?!

A big pack of documents falls through the letterbox. For the vast majority of home owners, this is the beginning of the insurance cycle. For all home owners, other than first time buyers. It’s the source of maybe half the calls I receive at work. We are discussing the arrival of the home insurance renewal invitation pack. The customer rips open the envelope and goes straight for the price. Nothing else matters. And hey, would ya believe it? It’s gone up! Again. They’re straight on the blower, summoning up the most indignant and authoritative voice they can produce, in the mistaken belief that the lowly paid advisor they are about the speak to actually gives a shit.

Let’s cut to the chase. The customer wants to know why the price has gone up. I can give you an instant answer. Because prices go up. Cans of beans. Lawnmowers. Milk. Diapers. Prices go up. Satisfied? No, of course you’re not. What you really want to know is what exactly is behind the increase, and more importantly – why is it more expensive that you can find on those amazing comparison websites. Ok. Here goes. The answers to your questions about price rises. All of them.

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It hasn’t gone up.

Actually bother to check up what you paid last year, or you will make yourself look a bit of a twit. I regularly receive angry calls about huge price rises from customers whose premium has either gone down or remained the same. I  recently had one who phoned up to cancel on principal, because it had gone up.  He simply wouldn’t have it, these outrageous hikes on premiums. He had bought another policy which was actually more expensive than his renewal, on principal. And, as we quickly established, had less cover. I read out the price we were quoting this year. And then I read out last years premium. He gloated, as smugly as he could, that this – his cancellation – would teach me. I quoted both prices again. A little more slowly, to enable his brain to take in the info. An awkward pause. The penny dropped. I gloated, smugly of course, that I had cancelled his policy, as instructed. Another penny dropped, as he realised I genuinely didn’t give two figs.

Inflation

What’s the rate of inflation? What’s it been over the last year? Give that some thought, before moaning about increases of a couple of per cent. A huge number of policies go up by only a few per cent each year. Customers will gripe. My most favourite gripe are those who believe that their premium should go down because they’ve never made a claim. I congratulate them on their careful stewardship of their home. But if they’ve never made a claim, then they’ll already be getting the maximum discount. What do they expect? The price to go down every year until eventually it is free? Not going to happen. There’s always going to be a minimum premium. Some customers won’t have it. I can but ask them if their house shrank this year? Did it get smaller? No? But they don’t often get that line of enquiry either.

Claims

Made a claim in the last year? Then your price will go up. This is the trickiest one of the bunch. The fact may be that your current insurer has a speciality. Low Risk insurers, for example, may or may not be your best bet  after you’ve made a claim. Brokers and Intermediaries* will quote your policy against all the insurers in their panel, and it may be that the only one on their panel who will now take on your policy are just plain expensive. Such is life, you may need to move on. But make sure your claim is settled first, or you could get yourself into trouble. Claims are something I will return to in another post.

Differing Cover Levels

This has to be, hands down, the most common cause of wildly differing prices when customers shop around and compare against their renewal. I bet you’ll look at some of the other reasons for price rises that I’ve listed and pin the blame on one of them. Maybe. But this is the most likely cause of them all. By far. The company I work for, for all their faults, are pretty competitively priced. So when a customer rings up and tells me they’ve found exactly the same cover for half the price, I immediately know two things. Firstly, I’m dealing with an idiot who has no idea what they are doing. Secondly, he or she is going to spend five minutes polluting my brain with utter bollocks. Five minutes that I will never get back.

Unfortunately, the idiot is often convinced he or she is an expert and will often end up cancelling a policy for an lower spec package that we could have provided for less than they are now going to pay. Sometimes they will refuse to discuss the cover levels of the new policy. More often than not, this is because they have no idea what the cover levels are. I’ll let you into a secret. I can see what cover you’ve selected. At least, if you’ve gone onto a comparison site and we’ve also offered a quote, then I get a look at what you entered. I know what sort of cover other companies offer. I can put two and two together.

Most common differences? First up, excesses. Sometimes, customers enter a sum into the Voluntary Excess box and believe it to be the total excess. Other times the alternative policies just have high standard excesses. Secondly, basic cover limits. This is a difficult point, and again another post will explore this issue. But I repeatedly see people selecting policies with ridiculously low cover limits on contents. Low enough, at times, that they are effectively uninsured. Thirdly, accidental damage cover. There are different levels of cover available. Fourthly, optional add ons which are not included in the new quote.

Invalid Cover

Sometimes, you don’t know whether to laugh or cry at the stupidity of home insurers. Under insuring yourself is one thing. Invalidating your new policy by deliberately leaving off somewhat important details is something else. Another recent example; a customer called to cancel their policy because they’d got one half price. On a comparison site, of course. I confirmed the name of the comparison site. There was only the one quote there. I asked if she bought it online with those details. She had. I confirmed that she’d selected all the right cover to match our policy.

But. Just one thing. She didn’t seem to have entered the rather enormous claim, nearly five figures long, that she’d had just a few months earlier. There was a pause. “Yeah, but it’s cheaper, and I’m shopping on price.” I tried to explain that it’s cheaper because it’s hopelessly invalid. Did she actually want her house insured in case of a fire or burglary or other disaster? She did, or so she said. I tried an analogy. So, you’re car shopping. You need a car because you have to drive to your job. You see two cars. One is in fine working order and costs £3000. The other has no engine, no wheels and ain’t going nowhere. But it is only £1,500. Which car do you buy? She wanted the one that works.

The analogy went completely over her head. “Yeah, but this other one is cheaper so I wanna cancel yours”. Ok. Let’s be more blunt. Here’s what happens. I cancel this, and then a few days, weeks or months down the road you get a call from your new insurer. They’ve run a check through a claims database and what do ya know! You failed to disclose a big fat juicy claim. They cancel your policy there and then, on the spot, back to the date it started. Now you have no insurance.

Worse, when you go to get a new quote, a whole bunch of insurers won’t touch you with a barge pole, because you have to disclose that you’ve previously had cover cancelled due to non disclosure. You’re not going to make the same mistake twice are you? Then, the ones who will insure you will charge you an arm and a leg. This policy I’ve got here for you will be cheap by comparison. Are you sure you want me to cancel it?

“Yeah, because the other one is cheaper”. Done, madam. Cancelled. Please get off my line. I can only deal with a certain amount of stupid in one day, and you’ve pretty much used up my entire days tolerance in one call. Some people deserve a little house fire now and then…

Post Codes

Insurers use a post code rating system. If there have been floods or subsidence claims in your area, or an increase in crime, they may adjust the rating of your post code area. And it may cost you. Even if you do live on the one hill in your area that recently got flooded by the nearby river and are in no danger of a deluge yourself. Bad luck.

Fortunately for you, not all insurers use the same ratings. So other insurers may be fine. I cannot even begin to tell you how quirky underwriters can be. We have one insurer on our panel who’ll decline you if you had a County Court Judgement 20 years ago. But if your entire village got washed away in a monumental flood last winter? No problem!

Commission Editing

Maybe you feel I’ve been biased towards the corporate giants and scathing towards the customer so far. You have me labelled as a lackey of the insurance industry. Then this one is for you. It’s a policy I think is utterly disgraceful. Disgusting. Unethical. And is most definitely not about ‘treating the customer fairly’. That last point is an important one. Insurance companies, all of them, boast about Treating Customers Fairly. Check Google.

What happens is this. Maybe last year you paid £200 for your policy. This year, they quote your renewal, and it comes up £185. The price has gone down. But, the brokers management reason that most people are happy if the premium stays the same. So they simply add £15 to the renewal price. There’s no justification for it. It’s simply taking advantage of customers, many of whom may be elderly and not have the ability to shop around an awful lot.

There was a related article on the BBC recently, although that concentrates on automatic renewals. The commission editing happens on all renewals, regardless of payment method. You might want to consider this next time an insurer offers you a deal where they will ‘freeze the price’ for two or three years. Yep, I’d take that with a pinch of salt.

No Claims Discount

Another naughty practice by some companies. They offer a discount if you haven’t made a claim. Up to nine years, some of them. Nine years?? In two years of dealing with policies, I don’t think I’ve ever seen an extra discount awarded when changing the NCD from 5 to 9 years. Pfft. But this isn’t the con. The con is that they don’t amend your NCD as the years go past. Why should they? To do so would mean paying someone to press buttons to make policies cheaper. Why not not pay someone and see more expensive policies?

So there you have it. Eight answers to your grumbles about rising insurance prices. It is, truly, a minefield. Good luck!

The Great Flood

When I arrived back in the UK in February 2011 the country was stricken with drought. That changed about a year later, when it began raining. It hasn’t stopped since. The country has been stricken with flooding for the last year as a result. A nightmare for insurers and home owners. The photo below is of a river going through a field near to my home.  I accidentally mapped it in Poland in Lightroom, but it is in fact in Dorset. I promise. I worked in a service station sited alongside the field for the best part of six years. It always flooded during heavy rains.

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I have to ask a few dumb questions when doing home insurance quotes. One of them is, ‘has your property, or any other properties within 3.1 miles previously suffered from flood damage’. I add a caveat, of sorts…..’to the best of your knowledge’.  I get some dumb answers to match my dumb question. Some people will tell me there hasn’t been any flooding since the great flood of 50, 100 or 200 years ago. They should probably just shut up. But they don’t, so I tick the box and send their premium shooting up.

Others just answer ‘no’. Even though I often know the answer is yes. The most responsible answer to such a dumb question? ‘What sort of a dumb question is that? Three point one miles? How am I supposed to know?’ It’s not, however, an acceptable answer. I need a yes or a no, and I either tick the box or I don’t. The insurance industry and government have a real headache on their hands with the issue of flooding, and it doesn’t look like being resolved anytime soon.

On the subject of home insurance, I have a project in the offing. A ‘dummies guide to insuring your home’ sort of a thing. An insiders guide cum expose. One thing that has become apparent to me over the last couple of years is that 99% of home owners haven’t got the slightest clue what they are doing. Customers will complain that insurers try everything to wriggle out of claims. Do you know how often I hear that? About the same amount as I hear people tell me that they haven’t read their documents because ‘no ever actually reads them, do they/  I haven’t got time to read all that stuff, there’s too much of it/ I just file them for when I need them/…’ etc.

So in summary, people who don’t know what they are insured for, and what they aren’t insured for, get upset when they find out too late what they are insured for or (more to the point) what they are not insured for. The sad fact is that the majority of home owners in the UK are dummies. They need the appropriate guide. I doubt they will read it. But for those that do want to know how to get a quote, the best price, the right cover and how not to make the silly mistakes I see people making every day, I will provide. At a cost, of course. The joy of Kindle publishing…

The Customer Is Not Always Right

A few months before I abandoned Mexico, I published a book entitled ‘TEFLers Guide to Mexico’. The title was perhaps a bit misleading, although not entirely untruthful. It was just a collection of my blog posts. I turned into into both a printed book and a Kindle book, available on Amazon. I became a published author. Self published, but who gives a damn. It’s another item crossed off on the ‘Things to do before you’re <enter next birth decade here>’ list. The Kindle book has also sold beyond all my wildest expectations. Mind you, my wildest expectations were that it might sell one or two.

And sales equal profits. I like profits. They come in handy. I have been meaning to create a second edition for the last year and a half, and do a proper job on it. In other words, accompany the selection of blog posts with a whole load more photos and a large section, especially written for the book,  that is actually all about TEFL and might actually give a potential English teacher a decent idea of what the industry is like. I haven’t gotten around to that so far, but I will.

I have also seen the potential for another book. A short book. Ok, a really short book. A magazine, maybe. I’ll call it Home Insurance for Morons. Or something similar, but perhaps more diplomatic. I’ve picked up a few things in the last year and a half, selling home insurance. As would be expected. I’m certainly going to stop short of calling myself an expert. But I’ve gotten the gist of how it all works. I’ve also come to understand that the general population doesn’t have much of clue what they’re doing, or what they’re buying.

How many times a day do I hear people complaining that insurance companies will wiggle their way out of paying a claim? Roughly the same amount of times I hear people saying ‘well, of course I didn’t read the documents. Who ever has time to read those?’ I reckon theres a pretty strong link between those two complaints. The number of complaints I hear from people when they find out that a home insurance policy isn’t a white goods warranty or a home maintenance plan or another random unrelated product.

I get a surprising number of calls from people who expect that compensation for injuries is covered.  Personal and Public liabilities cover is not the same as legal expenses cover, which many people deem to be surplus to their requirements when taking out home insurance. Fell over a broken paving slab? Walked into a rogue lamppost? Slipped on a mean spirited puddle of water? Tsk. Be more careful, but don’t call your home insurance company. Call someone like injurylawyers4u uk, who are far more likely to be able to help you.

Of course, the best part of any insurance related book are tales of customers who have called in with the most hilarious, tragic, ignorant or surprising incidents. Names and identifying details will be omitted but their stories must be told! A tame taster for you, and how not to cancel your policy. Customers are often prepared for a combative attempt to retain their business when they phone – they’re already hostile and determined to say ‘no’ straightaway. I recently received a call to inform me ‘I am phoning to cancel my policy’. Ok. I asked for her name and policy number. ‘No, just cancel it’. And she rang off.

I am quite certain she will be surprised, shocked and outraged when she discovers that her policy hasn’t been cancelled. And she will express amazement when she is informed that, generally speaking, we can’t cancel unidentified policies from anonymous callers. It’s not just us. Take your pick from any of the Which? recommended insurers. There isn’t one of them that claims to offer mystical services of a mind reading nature.

Anyway, I hope to have both these ‘books’ done by the end of the year. And with a little luck they will add to the growing pot of money I have in my Amazon account, for Kindle sales. I probably have enough there already to buy myself a Kindle! Then I could buy my own books. Till then, I leave you with a  random photo from the past, because all my posts must have a photo…

Fire And Fear