New rules regarding the information insurers must provide when a policy comes up for renewal reflect the paramount importance placed on price by consumers, latest research shows.
New renewal rules
The legislative changes, which came into effect in April, mean that insurers must now remind customers of the cost of the previous year’s cover, and not simply give a new quote, when a policy’s term is finishing.
Providers also have to encourage those who have renewed annually for several years to take a good look at how much the policy is costing.
Cost is king
It comes at a time when new research by the insurer Policy Expert shows that once again price is the number one concern for consumers when it comes to choosing insurance.
The hope is that a combination of greater transparency at renewal time, along with the desire to find good value among consumers, will lead to even more people shopping around for the best deals.
Home insurance driven by price
When deciding on home and contents insurance, the cost of a policy is the most important factor for 93% of consumers, Policy Expert’s figures show.
Transparency in areas such as pricing and the policy terms is the second highest priority, while good customer service and the likelihood of a claim being successful come third and fourth.
Switching driven by price as well as service
When it comes to switching policies and providers, price again wins the day, with 90% of consumers saying it’s the main driving factor.
Bad customer service is the second most common reason for looking elsewhere.
A financially savvy 38% say they always shop around at renewal time anyway.
Demand for fixed-price deals
There is also a huge desire among almost 9-in-10 (89%) of consumers to see a greater number of deals where the price of cover is fixed for at least two years.
While there are fixed deals out there, such as the two-year fixes offered by Policy Expert, there aren’t anywhere near as many as with other vital household costs, such as utility and broadband bills.
Reasons for wanting fixed-price deals
Some of the most common reasons given for wanting a multi-year fixed deal included:
- The peace of mind that prices can’t rise for a fixed period, especially as most insurers were thought to do this every year.
- The idea that it’s fairer as the price won’t change due to a large number of claims being made by others.
- The perceived time it saves not having to shop around each year.
- It helps householders with their financial plans and budgeting.
Reasons for not wanting fixed-price deals
A much smaller number were concerned about fixed deals. Reasons given included:
- The belief that shopping around and securing a new deal each year is better.
- Greater flexibility for the customer, as people’s circumstances can change.
- A fear that premiums would be set higher due to the fixed period being longer than a year.
- Fixed deals might lead to less market competition.
As an online insurer and broker, Policy Expert help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email, twitter and instant chat. For more information, you can call our experts on 0330 0600 600 or visit www.policyexpert.co.uk/contact for more ways to reach us.
Published 25 April 2017