Surveys conducted by the Financial Conduct Authority and Which have exposed the growing disparity between rates charged by household insurers to existing clients and those offered to new customers.
Research suggests that customers are being ripped off by ‘inertia selling’ (or automatically repeating policies) The practice has been dubbed the ‘loyalty tax’.
There are various situations that prompt a review of household insurance:
- Inheriting a valuable family heirloom such as a painting or a piece of jewellery;
- Buying a new home or downsizing,
- Stimulating a review of household possessions, or even,
- Seeing something at auction or on the Antiques Roadshow
All of these may suggest that existing insurance arrangements are inadequate. It is in these situations that people need the reassurance of an expert and where a specialist broker comes into its own.
Benefits of Using an Insurance Broker
What many people fail to realise are the benefits of using an insurance broker rather than simply going on line and trying to root out the best policy.
- Having an intermediary between the client and the insurance company, saves much more than money.
- The broker that understands your particular requirements,
- Shops around for the most appropriate cover
- Acts as a mediator, fighting your corner when claims arise
- Of equal importance is the broker’s ability to negotiate worthwhile discounted premiums based on client’s loyalty and a good no-claims record
Benefit from Personalised Service
One example of a specialist insurance broker with many longstanding household customers, is Hallett Independent. Adam Prideaux, its CEO, is determined that longstanding client relationships should benefit from in-depth knowledge and a personalised service that cannot be replicated by heavily marketed but inflexible household policies.
The danger is that these apparently competitively priced policies, sourced online or via a call centre conversation, simply do not fulfill requirements and can often include exclusions and warranties that severely restrict the cover.
Over 65’s particularly vulnerable to Loyalty Tax
It also seems that the over 65’s* are particularly vulnerable to the ‘loyalty tax’.
Adam Prideaux points out that
“In our experience, reviewing insurance is often driven by a claim that has been badly handled or some other sort of crisis and inadequate attention is often given to the process. As in equities, the value of contents can go down as well as up and if, for instance, a customer has been insuring their brown furniture at the sort of values they paid for it decades before, the chances are they are paying too much”
Get specialist Insurance Advice
Hallett Independent specialise in arranging household insurance. Established over 20 years ago and with a highly experienced team, they have a broad client base and look after high value homes, art collectors, dealers, museums and historic houses.
They offer a personal service aimed at reducing costs while widening cover. They have offices in central London and Hampshire and are delighted to visit and provide free competitive quotations and advice on risk management.
