A question about home contents insurance in the UK.

October 27, 2006 10:21 AM

A question about home contents insurance in the UK.

It's suddenly become apparent that we're paying far too much for our home contents insurance and need to change. Although obviously can't post too many details (which is why I'm being anon), I was wondering if anyone could offer advice about changing and were to look for the best deals.

The real sticking point seems to be security -- premiums seem to be very high -- despite the fact we live in very secure housing - two intercoms and another ringable door before even getting to the front door and we live thirteen floors up in a tower block which makes the traditional methods of breaking in almost impossible.

It's the other unexpecteds and unmentionables that we're really interested in -- our current provider currently has a freezer clause that says we need to lose a hundred pounds worth on an accidental defrost before they'll pay out and there's an upper cap of £250 which seems wrong to me.

Any ideas?

posted by anonymous to home & garden (4 comments total)

it's pretty much a rip-off in my opinion. i've never had contents insurance in 20 years. so i reckon i've saved, what, £10,000? Maybe more. What have I lost? A rolex worth about £750 a few years ago. That's it. If you're really secure (as you seem to be), then your main hazard is fire. See if you can get a fire-only insurance maybe: should be a lot cheaper.
posted by londongeezer at 10:50 AM on October 27, 2006

Are you positive you're not paying for buildings insurance at the same time?

Part of our rental contract was that we had to get contents insurance. This was surprisingly difficult to find. I did find something with Endsleigh (they do a lot of student stuff) which wasn't mentally silly.

The other factor is your postcode. If you move house, you might find your premium halve, or double.
posted by randomination at 10:54 AM on October 27, 2006

Money Supermarket will compare quotes and cover from lots of different insurers (most, but not all, of the major UK companies) and give you a list, so you can 'select more' from the ones that interest you.
posted by essexjan at 11:07 AM on October 27, 2006

Best advice is to call around and get quotes. You can use those quotes to further reduce the amount offered by any individual company.

If you have furniture, clothes, jewelry, computers, books, CD's, etc. you probably don't want to skip insuring yourself. With a high excess (deductible) your rates will be much lower, but your out of pocket expense will be higher. In this case you are insuring against a catastrophic loss.

Ask anyone who has lived through an apartment fire caused by someone else if you should skimp on contents insurance. Even if you are careful and do everything right, you can still get burnt (as it were).

Likely the cost of claims in your post code are the reason for your high premiums. Nothing you can do about that if your area is prone to claims (for whatever reason).

The excess and cap on your freezer clause is there to keep your premiums low. That is a very common claim (and frequently padded) and would cost everyone something around an additional £50 a year to insure will no excess and no limit. Which would you rather pay?

Also, it is common for pretty much everyone to underinsure their contents (a fire won't take out all my stuff, right?). So your insurer is not making the premium to cover the real cost of the loss. This is based on the fact that the 1st £10,000 of coverage is a lot more expensive than the last. If everyone is underinsuring, the insurer is paying out maximum claims much more often, thus having to increase the cost of contents cover. Kind of a self-fullfilling prophesy.

Competition in the insurance industry is pretty strong and margins are usually pretty tight. On a typical policy, a large insurer may make £15 profit. The rest goes to operating costs, government taxes, reserves, and for a large part - reinsurance. Your cost is literally based on the actual cost for paying out claims for your post code (in most instances). So after paying overhead, the claims in your area, taxes, and reinsurance, the insurer is left with a surprisingly small amount per policy. The issue is that you are subsidizing your neighbors, but at the same time, they are subsidizing you. All comes down to who claims and who doesn't to find out who is paying "too much".
posted by qwip at 5:23 PM on October 27, 2006