We’ve got the household insurance blues

Insurers often promise the sun, moon and stars but won’t pay when you need it most

Irish Mail On Sunday readers Robin and Glenys Rowland would be forgiven for thinking that their house cover isn’t worth the paper its extensive small print is written on. The insurance they paid thousands of euro for over the years was practically worthless when it came to claiming for freezer food spoiled in Storm Ophelia (see our panel right).

One lesson we can learn from their story is to beware the marketing baloney of insurance companies .

Some even give the impression that they prevent bad things from happening!

An insurer’s advertisement once compared being without life cover to ‘jumping out of a plane without a parachute’!

A parachute saves your life. Such an insurance policy pays out money to someone else after you die – if the onerous small print conditions are negotiated.

You’d swear insurance companies were more altruistic than Mahatma Gandhi, existing only to ‘protect’ us from all the bad things in life!

They’re not. They are here to make a buck at our expense and if they can find ways to legally wriggle out of paying claims they will, usually through swathes of conditions written into the ‘small print’.

Taking out insurance is like making a bet on something bad happening. You’re gambling that if it does, the payout will ease the pain. But the insurer sets the odds and inserts conditions in the contract to suit itself.

So don’t bother with ‘small ticket’ cover for gadgets, mobile

fury: Robin and Glenys Rowland phones or daft policies (that actually existed) for things like damage to gravestones or the cost of buying a round of drinks if you get a hole in one on the golf course.

According to the Daily Telegraph, in 2002 the Royal Falcon Hotel in Lowestoft on England’s east coast even insured its staff and customers against death and disability caused by ‘poltergeist or other abnormal phenomena’.

Insurers will insure anything if people are daft enough to buy the policy. If they had their way, we would buy cover for all types of nonsense and spend half our lives comparing the cost of cover, filling out forms to buy it or claim if we manage to negotiate the small print pitfalls.

Put the money you would have spent on these non-essential premiums into a savings fund and use it to cover yourself from ‘disaster’ when you drop your phone down the loo – or encounter a poltergeist.

You’ll probably come out on top financially as most of our insurance premiums goes on insurers’

bloated profits, salaries and marketing budgets.

Very little represents real value in terms of money you are likely to ever get back.

But there is some insurance we can’t do without.

By law, we have to insure our cars. And houses, health and lives need cover if their loss would be financially catastrophic for our families.

If the Rowlands’ house had burned down the policy would most likely have paid out.

So, like everyone else, Robin and Glenys will continue to buy house insurance.

The trick is to get the best deal you can.

The market for house insurance isn’t as developed as that of motor cover. The cost of your car insurance is a major talking point. People compare notes and take pride in getting the best deal.

So policies include protections for no claims bonuses.

We need to get picky about house insurance, using the power of the internet to get the best deal.

Our panel opposite includes some innovative offerings that might help inject some competition into the house insurance market. Another way to save money is to look closely at what your ‘friendly’ bank has to offer.

Many people mistakenly think they have to take the bank’s deal when getting a mortgage for fear of jeopardising their loan offer. Then they keep paying it for years – which may cost them dearly.

A survey from the website insuremyhouse.ie has claimed that banks charge more than online brokers generally. We asked banks to respond but they said that they needed more information to provide exact quotes.

Whoever is right, it’s certainly worth checking out quotes online before forking out hundreds on house cover.

Happy home insurance hunting!