Haggling comes to home insurance!
Everyone knows that merely mutely accepting your insurer’s renewal is a recipe for ever-increasing premiums, and surely the idea of shopping around, and using comparison sites to find cheaper premiums is now more acceptable even in the minds of the most stalwart of insurance users.
Yet in December the FCA announced proposals for new requirements for insurers to tell people what they paid last year when sending renewal notices. They found that including last year’s premium on renewal notices had the greatest impact in trials, prompting between 11% and 18% more people to either switch provider or negotiate a lower premium. And apathy is more prevalent than you might think- recently Which? found that some 48% of people asked just accepted the price they were quoted.
But what if you actually like your insurer? Perhaps customer service is more important to you than bottom-line price, or one company offers better cover in specific areas you need, or you’ve tested how good their claim payouts are, or if you just want to stay put for some other reason? Why not try haggling?
Although we’ve all done it on the beach in Morocco, most of us are a little more reticent about haggling on home soil, and much less in respect of intangible products like insurance policies. But that isn’t to say that it isn’t worth doing, however, as latest figures from our friends over at Which? suggests that it could be very much worth your while.
They surveyed 2,010 members of the general public and found that 59% were able to successfully barter for better deals with their home insurer, saving an average of £82, while 36% of policyholders decided instead to switch to a new provider saving an average of £72. Liverpool Victoria customers were the best barterers - 70% of those who tried were rewarded with a better deal, but they were closely followed by 68% of Saga customers and 66% of both Direct Line and Aviva’s bartering policyholders.
Of course, the insurers themselves are going to lament their pitiable position- insurance premium tax, has gone up by 3.5% on its own, from 6% to 9.5%, which will add around £10 a year to average cover, and the launch of Flood Re in April- which helps provide affordable home insurance for flood-prone areas- is expected to add another £10.50 a year on average to help foot the bill. But the rest of any increase- that’s down to them, and therefore potentially negotiable.
Other ways to reduce your bill, if you really can’t bring yourself to haggle, include making sure you meet security requirements, and checking out the APR on monthly payments- some APR rates can be as high as almost 40% (Endsleigh, 39.7%), meaning it would often be cheaper to pay annually even on a credit card rather than shell out monthly.