OT: Buildings & Contents Insurance - accidental damage cover - worth it?

[jim]

apologies for OT but I exepct (hope) the quandary has been faced by others in the group.

Household insurance renewal time - and our insurers are hiking premiums once again... looking to save a few quid I'm pondering whether the Accidental Damage Cover (for buildings and contents) is actually worth the =A3150 extra, especially when there would be, in the event of a claim, the excess to pay and then the future loss of NCB to pay for etc.

Ideally I'd trawl for a better quote but the house is old and has interesting (tho so far historical) evidence of minor subsidence, so getting quotes "honestly" has been a pain involving copies of surveys and paying extra with extra excesses on top etc.

NB we've never claimed on this insurance and the house has no mortgage! :>)

Anyone have any thoughts/experiences ?

thanks in advance Jim

[Ray]

It's only ever really worth it if you have to claim, looking at it logically!!!

Household insurance renewal time - and our insurers are hiking premiums once again... looking to save a few quid I'm pondering whether the Accidental Damage Cover (for buildings and contents) is actually worth the £150 extra, especially when there would be, in the event of a claim, the excess to pay and then the future loss of NCB to pay for etc.

Ideally I'd trawl for a better quote but the house is old and has interesting (tho so far historical) evidence of minor subsidence, so getting quotes "honestly" has been a pain involving copies of surveys and paying extra with extra excesses on top etc.

NB we've never claimed on this insurance and the house has no mortgage! :>)

Anyone have any thoughts/experiences ?

thanks in advance Jim

[RobertL]

And not even then (IME) because they up the premiums over the next few years to recoup the payment.

Robert

[Toom Tabard]

Have you looked at what your existing insurer would charge you as a new customer? Some years ago my Direct Line home renewal had crept up over the years to about =A3300. On their website online puchase, with introductory discounts etc, it was =A3106!! So I phoned them about this. The couldn't do anything on the phone but there was no problem cancelling existing policy and taking out a new policy (exactly the same cover) online. Since then, it seems they've set up a customer 'loyalty' section, so each year they send the renewal quote, I get a cheaper quote online, save it, and then phone them. They renew it at the lower price without me having to take out a new policy

I do the same with car creakdown cover, Each year, renewal with one year's no claim discount is more expensive than the current online quote for new customers with no NCD, so I phone them and get it at the lower price.

Toom

[Dave Plowman (News)]

My renewal (house and contents) came in from them recently - over 1000 quid for a three bedroom Victorian London semi. With no claims *ever* made on this household insurance, which I've had for many years. And about 30% up on last year. The most expensive option on their website was under 400 quid - and included higher maximums than my existing policy. I phoned them, and their 'loyalty' section was unable to even near match this. I next wrote to them asking for an explanation and haven't had one - other than a circular letter detailing their complaints proceeder. Thanks for reminding me. I shall write a stinker to the MD. The least they could do was answer my letter properly. Sadly, pretty well all insurance companies operate the same scam - relying on some customers being too busy to shop around. And always have done. It's about time the regulator sorted it.

[Toom Tabard]

Did they express any actual obstacle to you becoming a 'new customer' at the lower price, or did that question not specifically arise? That, as I say, is what I did on the first occasion before they had a 'loyalty' dept. Their call centre specifically acquiesced in this since I'd mentioned my intention when I phoned them, but it would interesting to know whether you could still just take out a new policy online and then phone to cancel renewal of existing policy.

Toom

[Dave Plowman (News)]

I did cancel the old and take out a new one. At less than a quarter of the renewal. The old policy had lots of things I simply didn't want - like accidental damage, etc.

[Mark]

If you look at it logically it's never worthwhile to have any insurance unless you know the risk is much greater than the insurer expects. Insurance companies asses the risk and then add on their profit margins.

[Roger Chapman]

I tend to look at it from the opposite perspective. It's only worthwhile insuring for losses you can't easily stand yourself.

[Clive George]

Not really for the big things. Insurance protects you against a loss which you couldn't afford - eg losing your entire house. The logic is more than just the expected payout, it's the magnitude of the losses and hence how much they affect you.

[Mark]

Even if the probability of the loss is very small?

[Bob Mannix]

Especially if the probability is very small (and the possible loss very large). Then the premiums make it "insurance". If the probablility of loss is high (eg a dental plan) then you will find it's not really insurance but that the premiums are so high they are just spread payments.

Roger is right, you *should* only really insure against things where you couldn't stand the loss itself or its cost (like building insurance).