Over the last 6 months I have had many of my family, friends and colleagues question me on what’s going on in the insurance world. Angry and even more suggestive of the stature of insurers (and those who work for them!) than usual, the line of enquiry always points towards why their motor or home insurance renewal has “gone up by XXXXX% since last year and I’ve not made any claims in XXXXX years.”
Just to be clear, I am not belittling this line of enquiry. I can say that as a consumer I have two other vehicles other than #MobileHQGU. One is a vanilla grocery getter for transporting the family, and the other is an older sports car which I can’t seem to bring myself to get rid of. I get great multi-policy discounts from the insurer of these vehicles, but I received a renewal just last week to see an increase of 35% and 20% on each respectively. As a customer this is very frustrating, and as someone within the industry, I understand why.
Over the last 18 months, the insurance industry has seen an increase in claims exposures, resulting in a need to lift premiums. Whilst each brand is different, I’ve heard of average portfolio level increases of up to 40%.
At the same time, as a new and very different type of portfolio we are constantly adjusting based on what we learn as we go. An example is the water damage excess we introduced a few shorts months ago – in that case we identified an issue, sought options for resolution, then chose to actually increase the excess rather than put in an “across-the-board” premium increase.
A lot of people have commented as follows “you said you put in the excess so that premiums don’t go up, now I have my renewal and it has gone up 25%!” My response is that the former was true. The step we took to deal with the water claim issue was an increased excess; otherwise the 25% may well have been 35-40% or even more depending on where you live, the make and model and modifications on your rig, even your age and driving history.
Mainly, my advice as a consumer is to shop around, particularly because of where the insurance cycle is at right now. All motor insurers are in the same place and now is the time to take stock. I would also advise though that you take into account more than just price – if you don’t understand what makes us different give us a call or check out our website – the intent of this article wasn’t to justify, it was to inform.
I did exactly that with the two vehicles I mentioned earlier on. The challenge I had was that the older sports car is rarely used and sits on a restricted use policy with a very strong sum insured. My research showed that I couldn’t replicate the sum insured and the premium I had to pay for a 30% figure was within 20% of the renewal I had received.
The other issue was that I couldn’t package up the family car. So shopping for that on its own with our home insurer saw a pretty strong deal with a premium that was 20% cheaper give or take – but the value was still lower and I didn’t have a choice of repairer as readily available as my old policy.
My decision in this case was to stay with my current insurer. In my circumstances, I couldn’t get the core and most important benefits to me (sum insured and choice of repairer) anywhere else, so I was happy to shoulder the increase.
It’s subjective, but like the oil I use or the accessory I buy – I look at insurance as just one of the decisions I make around my motoring enthusiasms, and I choose based on what suits me and the vehicles best.
Ultimately, if the worst were to happen I would want to know that the company I am dealing with knows what I and the vehicle are about, and has a product that is tailored to my needs and just “gets it.”