General insurance – Review before you renew

This article is about general insurance.  That is insurance for things like cars and houses.  Not about personal insurance, like life insurance, which works quite differently.  One of the main differences is that life insurance is guaranteed renewable, whereas general insurance is an annual contract where the insurer makes you an offer for the year and you choose whether to accept.  You can read more about personal insurance elsewhere on our website. 

When you receive a general insurance renewal notice, do you treat it like any other bill and just pay it? You could be paying hundreds more than you need to. Here’s some tips that could save you plenty.

Where’s the loyalty?

It’s a sad fact that most insurers offer discounts to new customers to get them through the door, but rarely offer the same discounts to their loyal existing customers. Why? They already have you! And, they are counting on you taking the view that you shopped around once and are happy with the policy you chose. Seems a bit unfair? That’s business, but you can beat them at their own game.

How much are you covered for?

The first step in reviewing your policy is to look at the sum insured and determine whether this is adequate. If you’re looking at a car insurance policy, are you insured for a set amount or market value? Do you know what the market value is? If you’ve made modifications to the vehicle, have you declared them to your insurer? 

If you’re looking at a home contents policy, is the insured amount enough to replace everything inside your home? Over time you may have acquired more possessions, or upgraded household items, and it’s easy to forget to increase the amount you are insured for. Remember that home contents doesn’t just include furniture and electrical appliances. If you lost everything in a fire of flood, you’d also need to replace things like clothes, shoes, linen, jewellery, and tools.

Are you getting your insurance for a good price?

To make sure you are getting a good deal on your insurance, when you receive a renewal notice:

1. Pretend to be a new customer – go to your insurer’s website and get a quote as if you were a new customer, and don’t be surprised if it’s cheaper than your renewal.
2. Check out the competition – use a comparison website, or two, to see what other insurers are offering for comparable cover. Find out what’s not covered, as well as what is so you are doing a fair comparison and thinking about what you actually want cover for.
3. Call your current insurer – armed with your research, contact your insurer and ask them to match the best price you found. Usually they will and it could save you hundreds.
4. Consider increasing your excess – many insurance policies have what is called an ‘excess’, an amount of money you must pay before the insurer pays a claim.  Selecting a higher excess – if the insurer gives you a choice – may reduce your premium.  If you have savings and could comfortably afford the excess this may be worth considering.

If you take these steps and your insurer tells you they will only price match for new customers, tell them you will be happy to let the policy lapse and ask them if they would like to quote you as a new customer. This may sound ridiculous, but if that’s the game you have to play, play it. It’s your money!

Keep your insurer in the loop

Changes in your personal circumstances may affect your insurance premiums, for example, your car insurance premiums could change if you move house, change jobs and drive more/less, have an ex-partner who is no longer driving the vehicle, or gain a new partner who is driving the vehicle. 

Another example with home and contents insurance is that you may not be covered if your property is vacant for a long period, say if you were away with work or on a long holiday. This may be overcome by having a regular inspection by an agent or relative.  Your policy will have more information and your insurer should be able to give you full details of how you can reduce your risk.

Keeping your insurer up to date will ensure you are paying the correct premiums, and are less likely to have a problem if you need to make a claim.For more information, check out our Insurance money guide.