Homeowners Urged To Compare Home Insurance Quotes At Renewal Time
Homeowners have been urged to shop around for cheaper home insurance at renewal time after research revealed that those homeowners who remain with the same insurer, year in, year out, pay over the odds for their cover.
The research, carried out by the Your Money section in the Daily Telegraph with the assistance of price comparison site, Confused.com, revealed that that those homeowners who automatically renew their home insurance with the same provider each year are overcharged by a combined £500 million every year. Clearly, the findings of this research suggest customer loyalty does not pay for home owners.
Confused.com noted that 1 in 4 homeowners could pay less than the renewal quote from their existing home insurance provider. Those homeowners that shopped around and compared home insurance quotes saved £180 on average on the cost of their home insurance.
Bizarrely, some homeowners may not even need to change their insurance company to avoid higher premiums. For instance, one Daily Telegraph reader who held a Direct Line home insurance policy paid £280 for their cover at the outset of the policy, but was quoted a renewal premium of £550 a year later. Unhappy with that quote, the homeowner compared home insurance quotes online using a price comparison site and discovered that Direct Line was in fact the most competitively priced. The customer cancelled their existing Direct Line policy and applied for the same cover, but as a new customer and at a lower cost of £360, rather than the £550 renewal price quoted on the existing policy.
Direct Line explained that the difference was due to discounts it offers to new customers from time to time so that it remains competitive in the market. These discounts are one-off incentives and apply for the first year of the policy only. It insisted that the premium quoted at renewal in the following years reflected a fair price for the cover provided once the discounts were removed.
Confused.com said the findings of the research reinforced its view that customer loyalty was rarely rewarded for those homeowners that continue to remain with the same insurer every year. It said homeowners should shop around to ensure the price they pay for their home insurance remains competitive. Notwithstanding this, regularly reviewing the level of cover provided also enabled home owners to check they had adequate cover in place in the event they had to make a claim.
