When budget home insurance costs more
Filed under: News —
With the rise of insurance comparison websites, consumers are being driven to find the cheapest insurance policy - forgetting that the point of insurance is to cover for individual needs.
Unfortunately, a number of insurers are chasing price points in response to consumer demands, compounding the problem. This is not least where there are already individual insurance companies already targeting the budget section of insurance markets.
The problem of course being that the danger increasingly becomes one of consumers buying into home insurance on price alone, without properly checking that they have adequate cover for their individual circumstances.
Additionally, many consumers simply do not realise, or care to consider, that cheaper insurance tends to come at the cost of support. Which is fine so long as everything is running smoothly, but causes stress when a claim needs to be filed.
Ironically, as A1 brokers recently found when comparing home insurance reviews, some of the big name insurance companies are still able to compete on price, even against traditional budget insurers. The caveat being that many of these bigger insurers have well-established claims procedures and the support structure to go with them.
Of course, while it benefits the consumer to know that insurance markets are so competitive, the big concern is to ensure that cover is more than adequate.
What many people do not realise is that there are a number of exclusions that can apply for any individual home insurance policy - whether for contents, buildings, or both - which may not come up on a direct price comparison.
Common exclusions can be based on location, building age, and even the status of the person looking for insurance.
Even where cover is exactly what the consumer needs, they still need to be careful they go with an insurance company with proper support in the event of a claim. As the house insurance blog recently commented, “budget providers come under particular fire for not providing enough support or clearing claims faster.”
In other words, there are two key lessons for consumers:
1. Ensure you are probably covered
2. Ensure you are covered by a reputable and reliable company.
There are plenty of review websites out there, and searching for “review” of a particular home insurance policy or insurer should help identify some of the better insurance options out there.
Either way, the key lesson is that budget home insurance may not always be the cheapest in the long run, and that in many instances, as with all consumer products, “you get what you pay for”.
Story link: When budget home insurance costs more
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