In this nation of shoppers, which has been hitting the headlines with its level of spending and debt, there is usually a direct correlation between the amount of time people take to decide upon a purchase and the cost of the item.
However, when it comes to buying an insurance policy, people will often spend less time than they would when buying a mobile phone! When purchasing insurance policies, customers need to consider more carefully the potential cost of what is not covered by the policy. Indeed, a survey undertaken by RIAS has revealed that 79% buy insurance based upon price alone.
Insurance companies individualise their core offerings to customers by varying the numerous features of their policies and the prices they charge for them. Unfortunately, this makes it very difficult for potential customers to compare them on a like-for-like basis.
It’s no different from buying a mobile phone or some hi-fi equipment – some items have extra features that appeal, others have features that you’d pay extra for, but not necessarily benefit from. It is therefore crucial that customers take the time to shop around and read the exclusions listed in the small print, and consider carefully what optional extras they should add to their basic policy. Those buying insurance need to consider their circumstances and risks, and develop a shortlist of the features of a policy that are most likely to be important to them.
Although the lowest quote can seem attractive, it’s vital to know what you are actually getting for your money, and a cut-price premium often means that the actual level and nature of the cover being provided has been cut too. Until customers start to view some of the optional features of a policy as an essential part of the cover that best meets their particular needs, many will leave themselves vulnerable to risk. Individuals should consider things like accidental damage, garden care, home emergency – and should now seriously consider what is covered in the case of a severe flood.”
With the ABI’s claim that up to 10,000 of the 1.1 million new homes to be built in the S.E. by 2016 are to be located in floodplains, and the commonly held view that the weather will become more extreme means that the importance of reading the small print and tailoring your policy to your requirements can only increase.
Tailoring your home insurance policy to your needs is crucial as most basic household policies, for example, do not cover home emergencies, storm damage to garden fences. Not withstanding these financial implications, emergency tradesmen are going to be in short supply with demand for their services at a regional peak, after a gale for example, even if you could afford to pay their charges.
Shopping For Insurance
Some things to be aware of when shopping around for your insurance:
Postcode
Some areas are obviously ‘lower risk’ than others, and premiums will vary for the same type of property from one postcode to another. But even if you live in a ‘high-risk’
Your age
Older people pose less risk for insurers but not all insurers pass on the full benefit to their customers. Over 50s can obtain up to 35% savings on their home insurance.
Does it come as standard?
Cover included in the basic premium of one provider may well come only at an additional cost as an optional extra from another - and that might just be the cover which you critically need in the event of a claim.
While you are away
Insurers differ in the length of time their policy will allow you to leave your property unoccupied without loss of cover, so it’s critical that you check just what the limitations are if you are likely to be away from your home for an extended period.
Accidental damage
Fixtures and fittings, kitchen work surfaces for example, are classed as part of the building and are not as contents. You need to decide if you want accidental damage cover on either or both, and check what the premium includes as basic. (Simply stated, if you were to turn your house upside down and shake it, everything that would fall out would be classed as contents and everything else as part of the buildings.)
Home emergency
Finding a qualified plumber or electrician is hard, but finding one outside normal hours in an emergency, particularly one that affects many people in the same area can be nigh on impossible and prohibitively costly. Home emergency policies are now available at very reasonable rates and they make the whole issue of dealing with tradesmen as easy and worry-free as possible. You may want to check out the availability of this option and compare costs while shopping around.
