House insurance rip-off

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chillidoggychillidoggy Frets: 17136

As a classic example of why you should shop around every time the renewal comes up, my latest house insurance from Lloyds went up about 65% from last year. £298 up to £488, or something like it.

When I phoned Lloyds to tell them I wouldn't be taking them up on it, the woman I spoke to asked why. I told her to look at it and she started laughing, which coincidentally was precisely my reaction when I opened up the letter.

The stated reason for the increase was because the previous 40% new customer discount no longer applied. There was no explanation for the remaining 25% increase, however and as there were no other changes (apart from everything insured being a year older), she was also at a loss to explain it. I told her I was off to find another 40% new customer policy from someone else.

Shocking!


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Comments

  • Mine just went up by £100 (20%) for no apparent reason; I renewed with this company last year as it was reasonable, but this seems a bit off to me.

    I had car insurance with Admiral, and each year I would get a cheaper quote from Elephant (which THEY OWN), and they would give me the cheaper price to stop me leaving. What a daft waste of time.

    I'm just a Maserati in a world of Kias.
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  • It seems a waste of time but there must be enough people who don't bother to research and haggle, so they probably make a decent amount of money off people who don't switch.  Seems like every insurance company does it from what I can tell, if it didn't work they'd all stop doing it
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  • martmart Frets: 5205

    ... £298 up to £488, ....

    The stated reason for the increase was because the previous 40% new customer discount no longer applied. There was no explanation for the remaining 25% increase, ....

    There was no other 25% increase. Your previous price of £298 was (approx) £488 with 40% taken off, since 40% of £488 is £195, so the discount took £488 down to about £293 - near-as-dammit the £298 you were charged.
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  • chillidoggychillidoggy Frets: 17136
    mart said:

    ... £298 up to £488, ....

    The stated reason for the increase was because the previous 40% new customer discount no longer applied. There was no explanation for the remaining 25% increase, ....

    There was no other 25% increase. Your previous price of £298 was (approx) £488 with 40% taken off, since 40% of £488 is £195, so the discount took £488 down to about £293 - near-as-dammit the £298 you were charged.

    Agreed, except there was no mention of a 40% new customer discount when I took out the original policy, in fact there were quite a few of them coming out at around the £300 mark. Whatever the maths are, I still wasn't having any of it!


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  • Chris777Chris777 Frets: 58
    I used to just pay house and car insurance renewal every year without questioning it, but as the internet got bigger, I shop around every year for both, and save quite a bit.
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  • midlifecrisismidlifecrisis Frets: 2341
    edited April 2018
    It seems a waste of time but there must be enough people who don't bother to research and haggle, so they probably make a decent amount of money off people who don't switch.  Seems like every insurance company does it from what I can tell, if it didn't work they'd all stop doing it
    exactly. is cost effective for them to lose a few customers against the many more who cant be bothered or dont realize and just auto-renew. thinking about it, these businesses are all based on probabilities so they've worked it all out.
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  • chillidoggychillidoggy Frets: 17136
    Just another point, they are legally obliged to tell you how much you paid last year on the renewal notice now.


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  • boogiemanboogieman Frets: 12314
    It seems a waste of time but there must be enough people who don't bother to research and haggle, so they probably make a decent amount of money off people who don't switch.  Seems like every insurance company does it from what I can tell, if it didn't work they'd all stop doing it
    Yup. My mum just used to renew every year with Age Concern. “They’re for old people, they wouldn’t overcharge an old lady now would they?”  This year it went up to nearly £500 for buildings and contents and it finally prodded her enough to tell me “it had got a bit expensive”. I got a better policy for her for £230. Insurance companies make a living out of robbing people who can’t or don’t bother doing 10 minutes research on the web. 
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  • Phil_aka_PipPhil_aka_Pip Frets: 9794
    My house & contents is with Lloyds. They shop around, but (i) they must have a limited pool that they shop around from (ii) they must take their cut. It's a bit of a compromise, maybe if I did the shopping around I could get cheaper, but while they're saving me time & hassle I don't mind too much if their price isn't the absolute rock bottom so long as it's generally cheaper than what I could be paying.
    "Working" software has only unobserved bugs. (Parroty Error: Pieces of Nine! Pieces of Nine!)
    Seriously: If you value it, take/fetch it yourself
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  • boogiemanboogieman Frets: 12314
    My house & contents is with Lloyds. They shop around, but (i) they must have a limited pool that they shop around from (ii) they must take their cut. It's a bit of a compromise, maybe if I did the shopping around I could get cheaper, but while they're saving me time & hassle I don't mind too much if their price isn't the absolute rock bottom so long as it's generally cheaper than what I could be paying.
    If they’re just acting as brokers (like the AA do) you’ll be paying £30-40 on top of what the policy actually cost, as an arrangement fee. Doesn’t that amount make it worth spending a bit of time on sorting out yourself? 
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  • IamnobodyIamnobody Frets: 6887
    Mine went up £68 for adding another bedroom...

    I haven’t increased the sum that my contents are insured for and... 

    The original policy covered a rebuild cost far exceeding what it would actually cost to rebuild 3 or 4 beds.

    Cunts.
    Previously known as stevebrum
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  • randellarandella Frets: 4088
    It seems a waste of time but there must be enough people who don't bother to research and haggle, so they probably make a decent amount of money off people who don't switch.  Seems like every insurance company does it from what I can tell, if it didn't work they'd all stop doing it
    They put the price up, you phone up.  Haggling ensues.  The haggler (you) will be able to get a certain discount based on your history of purchases (policies and add-on crap).  The more favourable your history is, the more discount you'll get.

    You don't know what the available discount is yet, but the haggle-ee in the call centre does because they're looking at a bit of software which has dredged up your purchasing history and run a quick algorithm over it.

    The whole operation is predicated on the haggle-ee giving away as little as possible, and the odds are stacked dramatically in their favour because the haggler has no idea of the wiggle room.

    Money is made, world keeps turning.  You heard it here first, folks.
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  • JAYJOJAYJO Frets: 1526
    I use uswitch and have saved by switching most things every year. 
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  • randellarandella Frets: 4088
    JAYJO said:
    I use uswitch and have saved by switching most things every year. 
    Yep - and it's the insurance and utility companies' habit of loss-leading then banging up the price in year two that's led to the proliferation of price comparators.

    Bloody wish I'd thought of starting one. :)
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