Contrary to what comparison sites would have you believe, there’s more to modern-day home insurance than just price. The variety of features, benefits and added extras in today’s market has never been so diverse. And service levels range from the reassuring ‘can’t do enough to help you’ brands to those ‘can’t be bothered to pick up the phone’ providers that give insurance a bad name.
What’s slightly worrying, is that while GI products are becoming increasingly rich and varied, there are still plenty of consumers out there who can’t contain their indifference. Thanks to a misguided fixation on price and a constant stream of ‘cuddly toy’ marketing campaigns, they’re heading straight for the cheapest options without a second thought for whether they have the right level of cover.
CHOOSING THE RIGHT PRODUCTS
The big problem with home insurance – or any insurance for that matter – is that consumers are investing in something they don’t really want to use. It’s not an aspirational purchase, which is why most people are keen to keep costs to a minimum. What doesn’t make sense, is why anyone would hand over their hard-earned cash for a policy that may not be fit for purpose. Surely, it’s worth checking the benefits before making any decisions.
Interestingly, in a recent Paymentshield survey, we discovered that 39% of consumers are confident they understand what’s covered by their buildings’ insurance policy (31% for contents). That means that around two in five people are paying for benefits that could be as useful as the proverbial chocolate teapot.
In the same survey, 53% admitted that they hadn’t checked to see if they had adequate cover within the last 12 months. Again, it may seem trivial, but this lack of interest is precisely what leads to claims shortfalls further down the line. It’s also the reason why the GI industry is crying out for financial advisers.
RECOMMENDING THE RIGHT BENEFITS
With Paymentshield, it’s easier than you might think to support your clients with GI. We give you easy access to five-star products, a choice of reputable insurers and a quoting system that provides you with like-for-like quotes in a matter of seconds. Plus you can manage all your policies online, via Adviser Hub.
More importantly, you can tailor the cover to your clients’ individual needs, by selecting benefits that match their property and their lifestyle. And if you’re wondering where the gaps are most likely to be in their existing cover, here are three of the most common home insurance omissions:
Accidental damage cover
On a contents insurance policy, this benefit provides compensation for everyday accidents and mishaps, such as knocking over a vase or spilling wine on the carpet. On buildings insurance, it covers damage caused to fixtures, fitting and any part of the structure, ceilings and decorations. A classic example is being in the loft and your foot fall through the floor and into the ceiling of the room below.
In our consumer survey, 64% of people thought that accidental damage cover was automatically included on their home insurance policy, which it is to a certain extent on a Paymentshield policy. However, it’s usually an optional extra. This is a common oversight, which is well worth checking with your clients because as well as being a valuable benefit, it’s also one of the most popular claims.
Personal possessions cover
This is another useful benefit, which is designed to protect personal belongings that are lost, damaged or stolen while away from the home – such as mobile phones, jewellery and sunglasses.
Again, over half of consumers in our survey (55%), thought that personal possessions cover was automatically included in their existing policy. And yet, it’s generally an added extra, which needs to be selected at the point of purchase.
Trace and access cover
It isn’t always easy to determine where the source of a leak is coming from in a property. Sometimes it takes a little bit of investigatory work, such as lifting floorboards or chipping away bits of plaster.
Like 44% of consumers, you might assume that any damage caused by investigatory work would be covered on an insurance policy. But in reality, that isn’t always the case. Better policies will generally cover it as standard, but a large proportion won’t – so it’s always worth checking up-front.
PLUGGING THE GAPS
While there will always be some providers who limit their cover to make themselves more competitive, there are also those who make benefits optional for the right reasons – to give customers more choice and help them manage their budget.
The thing to remember is that everyone’s situation is different. If your client has a house full of cats, they’ll probably want a policy that covers pet damage. Or if they have young children, it makes sense to include accidental damage cover. But these benefits may not be wanted or needed by everyone. Listing them as optional extras is simply a way of stopping people from paying for things they don’t need.
The truth is, there are plenty of good home insurance policies out there. What consumers are really lacking is good advice… and arguably the biggest omission of all, is financial advice!
Take a look at the recordings from Our Changing World conference for more insight into the current landscape of financial services and general insurance.