In­sur­ers must show last year’s pre­mi­ums in re­newal no­tices. Use this when search­ing com­par­i­son sites to see sav­ings. Com­pa­nies of­ten profit from add-ons such as le­gal cover. It’s rarely used and pos­si­bly not worth it. You may be cov­ered for this else­wher

The Wharf - - Property -

In­sur­ing your home is get­ting more ex­pen­sive. Ear­lier this year, Which? re­ported a 7.6% an­nual in­crease for prop­erty and con­tents cover – three times the rate of in­fla­tion. But for many, it’s more. One reader told us his in­surance had al­most dou­bled af­ter years of stand­ing still; an­other how she bought a home and con­tents pol­icy for £250 one year but was quoted a re­newal of £375 – she com­plained and they halved the in­crease to £312 but she went back to the same com­par­i­son site and found the same pol­icy with the same com­pany for £255. And last win­ter, The Guardian re­ported how Hal­i­fax charged loyal cus­tomers £1,227 but £370 for the same plan for new cus­tomers.

Cit­i­zens Ad­vice has put in a su­per­com­plaint about in­sur­ers and oth­ers pe­nal­is­ing long term cus­tomers to watch­dog, the Com­pe­ti­tion and Mar­kets Au­thor­ity, which has to re­spond by the end of De­cem­ber.

In­sur­ers blame In­surance Pre­mium Tax – it has dou­bled over the last three years to 12% (there’s no VAT on pol­icy costs) but that’s just part of the story.

But in the mean­time, you can cut costs. In­sur­ers can play two sneaky – al­though le­gal – tricks on ex­ist­ing cus­tomers.

They may send re­newal no­tices shortly be­fore poli­cies ex­pire, hop­ing you’ll be pan­icked into ac­cept­ing their terms. Make a diary or smart­phone note to shop around for new cover at least a month ahead.

The sec­ond sleight of hand is au­to­matic re­newal. Here, of­ten with­out you be­ing aware, you’ve opened your bank ac­count to the in­surer to take next year’s pre­mi­ums. Do­ing noth­ing, means pay­ing what­ever the in­surer quotes.

Some com­pa­nies make it hard to can­cel di­rect deb­its – you may have to phone and talk to them. In­sur­ers know some cus­tomers want an easy life and won’t do this – even if it costs them.

You need in­surance. Mort­gage lenders in­sist on build­ings cover al­though you are al­lowed to shop around – they can’t force their poli­cies on you. Those who have paid off the loan don’t have to buy cover but should. Renters only need con­tents cover.

One sure-fire way of cut­ting costs is to up the “ex­cess” – the first slice of any claim which you pay your­self. Go for the largest amount you can af­ford – this cuts pre­mi­ums but also means you won’t make smaller claims which will in­crease next year’s bill.

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