In our last post, we covered 10 definitions in home insurance that customers may not know. In this blog, we’re looking at common questions that you might have while thinking about the price of home insurance or your renewal.
There are 3 main reasons why your price might go up by more than inflation at renewal: you’ve recently made a claim on it (and so may have lost a no claims discount), insurance premium tax has increased, or the insurer has decided that it’s more expensive to provide cover (i.e. it deems it a higher risk).
Usually yes, most monthly payments to insurers are done through credit agreements which are in effect loans you take out so the insurer is paid in full and you pay a percentage on top for the flexibility of monthly payments. At coverbaloo, we don’t use credit agreements so it’s the same price whether you pay monthly or annually.
You earn this discount by holding insurance for a period of time without claiming, so ‘good behaviour’ is rewarded in lower prices. They are transferable between insurers, though providers differ on the maximum number of years they’ll discount. In most cases where your premium goes up after a claim, it’s because of losing this no claims discount.
Usually, yes – but not always for the reason you think. The price of your insurance may go up because of the claim itself, if it could occur again (like a flood). But most of the change in premium comes from a loss or reduction of your no claims discount. The larger this was potentially the bigger the increase in premium could be.
Your premium is made up of three key parts:
1) The cost the insurer charges to cover the risk and to pay claims
2) Insurance Premium Tax (set by the government, currently at 12%)
3) Fees and charges, like a new policy or renewal fee but these vary between insurers
At coverbaloo we don’t charge any fees at all. For setting up a policy, making changes, or cancelling – there’s no hidden costs anywhere here.
Other insurers want their money upfront, so they make you take out a loan and pay for your insurance in monthly instalments via that loan (which costs you interest). At coverbaloo, there’s no charge or loan!
While there’s no guarantee that your price won’t go up, what is now guaranteed by regulation is that you won’t pay more at renewal than you would as a new customer. That means that your renewal price must be the same or lower than if you went and quoted for a new policy through the same channel.
It’s always a good idea to shop around at renewal, but it’s also a good idea to auto-renew your policy. If you don’t auto-renew and for some reason don’t sort another policy or tell your current provider you want to continue, then you could be left with a gap of cover and unable to go back to the same provider for the same price (as your renewal quote may no longer be valid).
It shouldn’t matter how you choose to get in touch with your insurer (phone/letter/email etc), they have to accept the complaint regardless. Ideally you should be specific with what you are unhappy about and what outcome you would like to see to resolve this. If you’re unhappy with their answer, then you can escalate it to the Financial Ombudsman Service.
If you have any circumstances that you want to make us aware of that could be classed as a vulnerability, you can tell the team in any way you like (phone/email/post) and we can note this on your policy to ensure we’re meeting your needs. You can read more information about our Vulnerable Customer policy here.
Hopefully you learned something new from these questions – check out for the rest of our blogs for more information and useful tips about insurance.
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