Why looking around is a necessity when it comes to your insurance premium

The best customer may be a loyal one, but the best consumers are utterly disloyal.
While it would be nice to think that insurance companies, banks and utilities save their best deals and prices for those who faithfully return to support them year after year, the sad reality is that this is far from the case. Central bank research has shown that the insurance industry in particular sees loyal customers as suckers, suckers to be milked for as high a premium as possible; punishment for their apathy.
It is a “misperception that loyalty is rewarded,” according to the study, and refers to the relatively low frequency of change. A quarter of consumers believe (wrongly) that loyalty to an existing home or car insurance provider is rewarded.
The good news, however, is that up to 80 percent of us “get in touch” with our insurer when the policy is renewed, but only one in four actually move elsewhere – 20 percent found comparing policies online confusing, especially when they are older, with lower incomes or less familiar with the Internet. So where are the customers and where can savings be made?
price running
Since last July, the nefarious practice of so-called price walking, whereby loyal returning customers are charged more on renewal than valuable new customers, has been banned. You pay a loyalty bonus – 14 percent on car insurance and 32 percent on home insurance.
The difference can build up over the years, but insurance companies can no longer use fancy algorithms to target them. Insurers had admitted they weren’t, but were caught checking by the central bank.
Double pricing
Unfortunately, what is not prohibited is the practice of double or differential pricing. Companies are still allowed to charge different premiums for the same product.
A new customer may receive a discount or introductory offer that is not offered to returning customers. So while you may not be charged more than an identical renewal customer, you may still be charged more than a brand new customer signing up for the first time with the same risk profile.
Dual pricing is banned in the UK. The industry here claims this is inappropriate as the lack of discounts results in higher prices for everyone.
Bonkers.ie’s Daragh Cassidy explains: “Of course, a 40-year-old driving a 1.1-litre Ford Ka with a five-year no-claims bonus will always be charged less than a 20-year-old driving a 2-litre Audi with no claims driving experience. However, other things being equal, you can no longer be penalized for being loyal to your insurer.”
Two identical renewal customers must be treated equally.
car insurance
Actuaries are like bookmakers at a racetrack. Your job is to match the favorites with the long shots and price to match. For example, Axa has too many middle-aged women driving cars older than 10 years, but Zurich may have too few.
Or Aviva may have a surplus of young, male drivers in rural areas, but Allianz has room for more. So one increases his premium for a certain risk profile, while the other lowers it. Trouble is, unless you ask, you won’t know.
Penalty points have a greater impact on your renewal award
In fact, penalty points have a greater impact on your renewal award. Up to three points can be ignored, but anything above that and you’ll be in for a shock. If your car is valued at over €40,000, the insurer may insist on additional security measures such as tracking devices or immobilizers.
Under 25s and over 70s pay more for added risk. Carrying a higher deductible can reduce your premium, as can storing it in a garage overnight and not using it for work purposes other than commuting.
a house
Over- and under-insurance are the biggest problems. Overinsuring your buildings is easy as many people base coverage on the value of their home.
But that’s not what’s paid out when it burns down. Instead, you get the conversion costs and that’s all you should insure for (see below).
The land it stands on doesn’t need to be bought new, and that can cost a lot of dead premium.
Underinsurance means that any claim you claim will be reduced by the percentage that you are underinsured overall, so it’s not a saving.
Health
A medium-sized adult policy should cost €1,500 to €1,800 per year. If you pay more, totalhealthcover.ie’s Dermot Goode says you can save by splitting coverage based on who’s in your family. Children don’t need a top policy (there are no private hospitals for them), and younger people can afford a cheaper rate compared to older ones.
In fact, kids are often free on some plans. Make sure you get “young adult” discounts for under 25s.
If you are satisfied with a shared room, then you save a lot compared to a private room
Premium costs are largely influenced by accommodation costs. So if you’re happy with a shared room that’s a small ward for you and me, then you’re saving a lot compared to a private room.
Switching to a business plan – which may have an obscure name – can be identical to what you’re on now, but cheaper as it’s sold en masse to companies.
Calculate building insurance
Rebuilding a home after a disaster like a fire is a daunting task, not least given the construction inflation in items like wood, concrete and glass.
Insurance should be the least of your worries, but having the right amount of coverage can be confusing. When calculating the building percentage use updated annual building estimates available from Chartered Surveyors (scsi.ie) or your own insurer. This is a basic amount that includes rebuilding the house, installing a kitchen and floors etc, but you can add things like outbuildings and additional amounts for decoration and windows.
Insurance at the price your home would fetch on the market is a waste of money. It will not be paid out as insurers will simply cover the cost of building it again in the same place. Here are some examples.
Dublin: Three-bedroom semi-detached house (98 m²) costs €2,735 per m² for the conversion – €268,000 in total. A home like this could potentially sell for €430,000 or more depending on location, so insuring for that amount is folly. You can make real savings by verifying the correct costs.
Cork: A two bedroom townhouse (78m²) costs €2,384 per m² to rebuild – €186,000.
Galway: A detached four-bed room (119 m²) costs €2,393 per m² – €285,000.
Limerick: A four-bed detached bungalow (137 m²) costs €2,087 per m² – €286,000.
Single family homes tend to be cheaper to rebuild than those attached to other properties, although they sell for a higher price.
https://www.independent.ie/business/personal-finance/why-shopping-around-is-a-necessity-when-it-comes-to-your-insurance-premium-42209195.html Why looking around is a necessity when it comes to your insurance premium